HomeMy WebLinkAbout911807.tiff AR227?385
STATE OF COLORADO )
) SS.
COUNTY OF WELD )
The Board of County Commissioners of Weld County,
Colorado met in regular session at the Centennial Complex, 915 10th
Street, Greeley, Colorado on Wednesday, November 20, 1991 at 9:00
a.m.
There were present at said meeting the following:
Present:
U
. Chairman: Gordon E. Lacy
" Chairman Pro-Tem: George Kennedy - Excused
Q Other Commissioners: Constance L. Harbert
a C. W. Kirby
o � W. H. Webster
ox
ifFz Absent:
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x
u constituting all the members thereof.
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cox
There were also present:
- 0
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' x Clerk to the Board: Donald D. Warden
x
County Attorney: Thomas O. David
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co z The presiding officer announced that a public hearing
with respect to the Weld County, Colorado Industrial Development
CNH Revenue Bonds (Monfort, Inc. Project) Series 1991 had been held on
z November 13, 1991, notice thereof having been duly published in The
c Greeley Tribune, as evidenced by the affidavit of publication
Co attached hereto as Exhibit A.
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C Z The following ordinance was introduced, the text of which
NC
is as follows:
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911807
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WELD COUNTY, COLORADO
ORDINANCE NO. 166
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE
OF $4, 100,000 INDUSTRIAL DEVELOPMENT REVENUE
N Ov BONDS (MONFORT, INC. PROJECT) SERIES 1991 TO
0 FINANCE SEWAGE DISPOSAL FACILITIES FOR MONFORT,
n o INC. ; RATIFYING CERTAIN ACTION HERETOFORE
✓ TAKEN; AUTHORIZING THE EXECUTION AND DELIVERY
Q BY THE COUNTY OF A FINANCING AGREEMENT,
E4] INDENTURE OF TRUST, BOND PURCHASE AGREEMENT,
o• s SUCH BONDS AND CLOSING DOCUMENTS IN CONNECTION
w THEREWITH; MAKING DETERMINATIONS AS TO THE
SUFFICIENCY OF REVENUES AND AS TO OTHER MATTERS
o RELATED TO SUCH BONDS; AND DECLARING AN
w EMERGENCY.
kr) x
n;
WHEREAS, the Board of County Commissioners of Weld
-Ix County, Colorado (the "County" ) , pursuant to Colorado statute and
w the Weld County Home Rule Charter (the "Charter" ) , is vested with
v the authority of administering the affairs of the County; and
z WHEREAS, the County is authorized by Article 3, Title 29
; N of Colorado Revised Statutes, as amended (the "Act" ) , to finance
"' m one or more projects to provide more adequate facilities for
disposing of sewage; and
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m w
el w WHEREAS, the County is further authorized by the Act to
N z issue its revenue bonds for the purpose of defraying the cost of
N financing any project; and
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N
w x WHEREAS, representatives of Monfort, Inc. , a Delaware
x corporation (the "Company" ) , have requested the County to finance
O m certain sewage disposal facilities of the Company, consisting of
pp m the expansion of pre-treatment facilities, the acquisition and
" installation of transmission mains and the acquisition,
w w construction and installation of other related sewage facilities
(the "Project" ) , which Project will be located within the County
and be owned by the Company, by authorizing, issuing, selling and
delivering its Weld County, Colorado Industrial Development Revenue
Bonds (Monfort, Inc. Project) Series 1991 in the aggregate
principal amount of $4, 100, 000 (the "Bonds" ) to pay the cost of
the Project; and
WHEREAS, on August 21, 1991, the Board of County
Commissioners adopted a resolution expressing willingness to issue
the Bonds to finance the Project; and
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WHEREAS, the Bonds will be issued, sold and delivered by
the County to Piper, Jaffray & Hopwood Incorporated (the
"Underwriter" ) to pay the cost of financing the Project, interest
on the Bonds during the construction of the Project and certain
costs incidental to the authorization, issuance and sale of the
Bonds; and
WHEREAS, concurrently with the issuance of the Bonds, the
- Company will enter into a financing agreement with the County
-' 8 providing for payments sufficient to pay the principal of and
Q interest on the Bonds and to meet other obligations as herein and
a therein provided; and
o
� 3
o x WHEREAS, the payment of the principal of and interest on
b w the Bonds will be guaranteed by ConAgra, Inc. , a Delaware
a corporation (the "Guarantor" ) ; and
O
a WHEREAS, the public hearing held on November 13, 1991
N with respect to the Bonds and the Project provided all interested
c individuals a reasonable opportunity to express their views, both
z orally and in writing, on the proposed issuance of the Bonds by the
a County pursuant to the Act to finance the Project; and
s V
o z WHEREAS, there have been presented to the Board of County
Zit-2 Commissioners: ( 1 ) the proposed form of Financing Agreement dated
N F as of November 15, 1991 (the "Financing Agreement" ) between the
a County and the Company, (2 ) the proposed form of Indenture of Trust
co, dated as of November 15, 1991 (the "Indenture") between the County
M w and Affiliated National Bank - Greeley, as Trustee (the "Trustee" ) ,
(3 ) the proposed form of Bond Purchase Agreement dated November 20,
N z 1991 (the "Bond Purchase Agreement" ) among the County, the Company,
No 4 the Guarantor and the Underwriter, (4 ) the proposed form of
a Guaranty Agreement dated as of November 15, 1991 (the "Guaranty
a 0 Agreement" ) between the Guarantor and the Trustee, -(5 ) the
Preliminary Official Statement dated November 11, 1991 (the
0 0 "Preliminary Official Statement" ) and (6 ) the proposed form of
� o final Official Statement dated November 20, 1991 (the "Official
Statement" ) .
.11 44
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY
COMMISSIONERS OF WELD COUNTY, COLORADO:
Section 1 . All action (not inconsistent with the
provisions of this ordinance) heretofore taken by the Board of
County Commissioners and the officers of the County directed toward
the financing of the Project and the issuance and sale of the Bonds
therefor be, and the same is hereby, ratified, approved and
confirmed.
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Section 2. The County shall finance the cost of the
Project, interest on the Bonds during the construction of the
Project and certain costs incidental to the authorization, issuance
o and sale of the Bonds by loaning the proceeds of the Bonds to the
+ u Company in accordance with the provisions of the Financing
. Agreement for the purposes described above.
� o
o
a Section 3. To defray the cost of the Project,
a interest on the Bonds during the construction of the Project and
o ≥ certain costs incidental to the authorization, issuance and sale
of the Bonds, there is hereby authorized and created an issue of
63c.‘1 revenue bonds designated "Weld County, Colorado Industrial
x Development Revenue Bonds (Monfort, Inc. Project) Series 1991" in
o the aggregate principal amount of $4, 100,000, issuable as fully
a registered Bonds in the denominations of $5, 000 or any integral
N multiple thereof, dated as provided in the Indenture, and bearing
�o interest from their date payable semiannually on June 15 and
a December 15 in each year, commencing June 15, 1992. The Bonds
41 shall bear interest at the rate of 6.758 per annum and shall mature
m u on December 15, 2001. The Bonds shall be payable, shall be subject
1/4.,, z to redemption prior to maturity and shall be substantially in the
r' w form as set forth in the Indenture. Pursuant to the Bond Purchase
r, F Agreement, the Bonds shall be sold to the Underwriter at a private
a sale at the purchase price of 998 of the principal amount thereof
co 'l plus accrued interest from the date of the Bonds to the date of
0051 delivery thereof. The net effective interest rate on the Bonds,
N taking into account such underwriting discount, is 6.8491748, which
z rate is hereby determined to be the maximum net effective interest
`" rate on the Bonds.
a
aSection 4 . The following determinations and findings
are hereby made in accordance with Sections 29-3-113, 29-3-114 and
° ' 29-3-120 of the Act:
N O
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(a) The amount necessary in each year to pay the
w w principal of and the interest on the Bonds is as follows:
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Annual Period
N 0 to and Interest Principal to be Annual Debt
o Including for such Retired in such Service
oin December 15 Period Period Requirement
U
a 1992 $299, 812 .50 $ -0- $ 299,812.50
ow 1993 276, 750.00 -0- 276,750. 00
o 1994 276, 750.00 -0- 276,750.00
O a 1995 276,750.00 -0- 276,750 .00
En a 1996 276,750.00 -0- 276,750.00
0 1997 276,750.00 -0- 276,750.00
u 1998 276,750.00 -0- 276,750 .00
a 1999 276,750.00 -0- 276,750.00
:: w 2000 276,750.00 -0- 276,750.00
`4° x 2001 276,750.00 $ 4 , 100,000 4 ,376,750 . 00
a
.+- a (b) No reserve fund has been established nor is
� proposed to be established for the retirement of the
Loz Bonds or the maintenance of the Project and accordingly
�'_1 it will not be necessary to pay any amounts into any
N m reserve fund.
a
w
a w (c) The terms under which the Bonds are to be
ro w issued provide that the Company shall maintain the
r z Project and carry all proper insurance with respect
N � thereto.
0
a u (d) The revenues payable under the Financing
a x Agreement and the Guaranty Agreement are sufficient to
o pay, in addition to all other requirements of the
N 0 Financing Agreement and this ordinance, all sums referred
�o to in paragraphs (a) and (c) of this Section.
mw
(e) The Financing Agreement requires the Company
to pay, in addition to all other requirements of the
Financing Agreement and this ordinance, all taxes payable
pursuant to Section 29-3-120 of the Act.
Section 5. The forms, terms and provisions of the
Financing Agreement, the Indenture, the Bond Purchase Agreement and
the Guaranty Agreement be and they hereby are approved and the
County shall enter into the Financing Agreement, the Indenture and
the Bond Purchase Agreement in the forms of each of such documents
presented to the Board of County Commissioners at this meeting,
with such changes therein as are not inconsistent herewith; and the
Chairman of the Board of County Commissioners is hereby authorized
and directed to execute and deliver the Financing Agreement, the
Indenture and the Bond Purchase Agreement and the clerk to Board is
hereby authorized and directed to affix the County seal to and to
attest such documents.
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Section 6. The form, terms and provisions of the
N O Bonds, in the form contained in the Indenture, be and they hereby
o are approved, with such changes therein as are not inconsistent
1/4Oo herewith; and the Chairman of the Board of County Commissioners is
u hereby authorized and directed to execute and deliver the Bonds and
o the clerk to Board is hereby authorized and directed to affix the
o a seal of the County or a facsimile thereof to the Bonds and to
o attest the Bonds. The signatures on the Bonds of the Chairman of
° c4 the Board of County Commissioners and the Clerk to Board shall be
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a either manually subscribed or by facsimile.
O
w Section 7 . The County hereby consents to the use of
L x the Preliminary Official Statement in connection with the offering
•• 0 of the Bonds and hereby ratifies and confirms all action taken in
`.-,° x connection with the use thereof. The County hereby authorizes the
�a use and distribution of the Official Statement in connection with
rn � the offering of the Bonds.
LD
H Section 8. For the purposes of Section 147 (f) of the
Internal Revenue Code of 1986, as amended, the Board of County
c� E
m Commissioners hereby approves the Bonds and the Project, including
a the following information regarding the Project: the Project will
w consist of the expansion of pre-treatment facilities, the
r' w acquisition and installation of transmission mains and the
r- z acquisition, construction and installation of other related sewage
; a facilities and will be owned and operated by the Company.
J
a Section 9 . The officers of the County shall take all
124 :,_ action in conformity with the Act required by the parties to the
O , Bond Purchase Agreement to effectuate its provisions and shall take
any and all action necessary or desirable in conformity with the
--� o Act to finance the Project and for carrying out, giving effect to,
a w consummating and confirming the transactions contemplated by this
ordinance, the Financing Agreement, the Indenture, the Bond
Purchase Agreement, the Preliminary Official Statement and the
Official Statement, including without limitation the execution and
delivery of any closing documents to be delivered in connection
with the sale and delivery of the Bonds and the filing of any
statements or reports with the Internal Revenue Service or with the
Secretary of the Treasury or his or her delegate necessary to
maintain the exclusion of interest on the Bonds from gross income
for Federal income tax purposes.
Section 10 . The cost of the Project will be paid out
of the proceeds of the Bonds and funds of the Company and none of
the Bonds will be the general obligation of the County nor shall
any of the Bonds including interest thereon constitute the debt or
indebtedness of the County within the meaning of the Constitution
or statutes of the State of Colorado, or the Charter of the County,
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nor shall anything contained in this ordinance or in the Bonds, the
Financing Agreement, the Indenture, the Bond Purchase Agreement,
the Guaranty Agreement, the Preliminary Official Statement or the
Official Statement, or any other instrument constitute or give rise
to a pecuniary liability of the County or a charge against its
general credit or taxing powers, nor shall the breach of any
agreement contained in this ordinance, the Bonds, the Financing
Agreement, the Indenture, the Bond Purchase Agreement, the Guaranty
v o Agreement, the Preliminary Official Statement or the Official
o Statement, or any other instrument impose any pecuniary liability
r o upon the County or a charge against its general credit or against
U its taxing powers, the County having no power to pay out of its
Q general fund or otherwise contribute any part of the costs of
o w financing the Project, nor power to operate the Project as a
o s business or in any manner, nor shall the County condemn any land
w or property for the Project nor contribute any land or other
property to the Project.
O
w Section 11. After any of the Bonds are issued, this
ry a ordinance shall be and remain irrepealable until the Bonds shall
.• w have been fully paid, cancelled and discharged.
Section 12 . If any section, paragraph, clause or
• �
provision of this ordinance shall for any reason be held to be
invalid or unenforceable, the invalidity or unenforceability of
o H such section, paragraph, clause or provision shall not affect any
s of the remaining provisions of this ordinance.
As
° Section 13. All bylaws, orders, resolutions and
00 w ordinances or parts thereof of the County inconsistent herewith and
m14 with the documents hereby approved are hereby repealed to the
N z extent only of such inconsistency. This repealer shall not be
g construed as reviving any bylaw, order, resolution or ordinance or
o „ part thereof .
o x
w :z4 Section 14 . This ordinance, immediately on its final
o c passage- and adoption, shall be numbered and recorded in the
M rn Ordinance Book of the County kept for that purpose, authenticated
- o by the signatures of the Chairman of the Board of County
mw Commissioners and the Clerk to the Board and public notice of the
adoption hereof given by publication in The New News, a newspaper
of general circulation in the County.
Section 15. Because the Project will be beneficial to
the County and its inhabitants and because it is possible the Bonds
may not be able to be issued as tax exempt bonds after December 31,
1991, an emergency is declared to exist, this ordinance is declared
to be immediately necessary for the preservation of the public
health, property and safety, and this ordinance shall be in full
force and effect upon passage.
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The above and foregoing Ordinance was, on motion duly
made and seconded, adopted by the following vote on the 20th day
of November, 1991. i
r BOARD OF COUNTY COMMISSIONERS
ATTEST: / r//'� WELD COUNTY, COLORADO
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Weld Cou3Ity Clerk to the Board
Gord . La ,airman
o� b. By:, li .�`�_, i� '-i , .,a. a Ac�,,i EXCUSED
' u De f -Clerk to the Boa George Kennedy, Pro-Tem
a n. , p
o APPROVE .. 'FORM: �j�.y ,✓�Ji/i.Zzifil-
o Constance L. Harbert
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vp x County Attorney C. W. Kirby
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STATE OF COLORADO )
) SS.
COUNTY OF WELD )
cic I, Donald D. Warden, the duly qualified and acting Clerk
o c to the Board of County Commissioners (the "Board" ) of Weld County,
o Colorado (the "County" ) do hereby certify that:
V
O 1. The foregoing pages numbered 1 to 8, inclusive, are
o w a true, perfect and complete copy of the record of proceedings of
o � the Board had and taken at a lawful meeting of the Board held at
O x the Centennial Complex, 915 10th Street, Greeley, Colorado, on
c.i a Wednesday, November 20, 1991, as recorded in the regular official
c book of the proceedings of the County kept in my office, said
u proceedings were duly had and taken as therein shown, the meeting
1/4L x therein shown was duly held and the persons therein named were
`.: w present at said meeting as therein shown.
Qo
- x
a 2 . Public notice of the adoption of the ordinance
rn a contained in such proceedings was published in The New News, a
� newspaper of general circulation in the County, on November 27 ,
H 1991, a copy of the affidavit of publication thereof being attached
JE hereto as Exhibit B.
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w IN WITNESS WHEREOF, I h hereunto set y hand and
affixed the seal of the County th' :dagyii 1991.
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EXHIBIT A
(Attach Affidavit of Publication of Notice of Public Hearing)
atcavit o: Publication.
N O STP.TE C= COLORADO
,-H U _.
O Gourd:of '.l'e'd.
•
O 0 ncements
H U NOTICE OF •
NI _ -= r'-.-
Ca PUBLIC HEARING `-r'` "'
a said Counry or Weid. being duly sworn. say :'rat ! ax
O W ' NOTICE IS HEREBY GIVEN an advertising clerk of
O � that at a regular meeting of
the Board of County THE GREEL EY DAILY TRIBUNE. and •
•
CL Commissioners o/ Weld THE GREELEY REPUBLICAN
County, Colorado- (the
tf? fal -County" to be held on that the same is a daily newspaper of general
Ca Wednesday, November 13,
Z 1991 at the Centennial dre lation and prnted and published in the Ow of
O Complex. 915 10th Street, Greeley, in said county and state: that she notice or
U Greeley. Colorado at the hour adverdsemenq of which the annexed is a true co has
W of 9:00 a.m., the Board of PY.
k0 a. County Commissioners will been published in said daily newspaper for consecutive
N hold a public hearing to con- (days) (iVie1X); that the notice was published in the
QS Sider the adoption of a reso- • regular and entire issue of number of said
lution authorizing the is- 9u every
.^4 suance of industrial level- newspaper during the period and time of publication of
a. opment revenue bonds to fi- said notice. and in the newspaper proper end not in a
nance certain sewage dis-
4 pose' facilities (the -Project') supplement thereof: that the firs publication of said
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tin U for Monfort, Inc. (the notice was contained in the issue of said newspaper
'Company". The Project will tearing date
\
be owned and operated by
VD 7 the Company and will con- - Thlrty-f trst
H H list of the expansion of pre-
--- W treatment facilities, the ac-
N E quisition and installation of day of October A.D. 19 91 --
H r./) transmission mains and the and the last publication thereoe in the issue of said
.-yN acquisition, construction and newspaper bearing date the
installation of other related
CO 41sewage facilities. The ag Tnlrty-f Its'
CD W grecate principal amount of
nO W such bonds to be issued by I
day of October aD. 19=1 ''
N the County to finance the
2 Project will not exceed that said :he Greeley Daily Tribune and The Greeley
N 55,200,000. Republican, has been pubiished continuously and
a
N < All interested persons are in-Rjt uninterruptedly durino the pedcd of a: teas: six
O vited to attend the public/ months next prior to the first issue thereof contained
Ph U P. hearing, which will be th said notice or advertisement above referred to;that said
only public hearing held b
W dt the County prior to the co newspaper has oeen admitted to the United States
C:4 S... sideration of the reso'uuo mails as second-class maser under the provisions of the
and the issuance of th Act of March 3, 1879, or an amendments thereof:and
0 r bonds. Persons wishing t Y
N O submit written comments i that said newspaper is a daily newspaper duiy qualified
r) on lieu of or in addition t for publishing lecal notices and advertisements within
HO speaking at the public hear' -
ing should submit suc the meaning of the laws of :he Stare of Colorado.
fIl W comments to the Count
Administrator net later than October 31 . 1991
the time of the public hear-
ing, Total Charce: Se9.90
Dated October 31, 1991. 1;
•
WELD COUNN, I r v -
COLORADO
�-�-"'1` _'��'� �-•
--
B Advertising Clerk
By/s/Dan Warden
County Administrator and Subscdbed and sworn to before me this
Clerk to the Board
*41 12th day of No vemb 9r A.D. 1St
My fmmission expires %-2%-52 &
/ / Notary Public
_10_
EXHIBIT B
(Attach Affidavit of Publication of Public Notice
of the Ordinance)
STATE OF COLORADO )
)s.s.
COUNTY OF W=LD
V,1LI_E r 0r.3 1`-_ ...
David H. Reynolds , being duly sworn ,
says that he is publisher of v�,•,• .
rr
The New News, a weekly newspaper - '
1 •
published in Keenesburg in said County
and State ; that said newspaper has a
general circulation in -said County -- -
and has been continousl and
uninterrupted)
Y , puolishad therein,
curing a period of at least
fifty-two consecutive weeks prior ti
the first publication of the annexe'
notice; that said newspaper is a
newspaper within the meaning of the
act of the General Assembly of the
State of Colorado,, entitled "An Act
to regulate the printing of legal
notices and advertisements , " and
amendments thereto ; tnat the notice
of which the annexed is a printed
copy taken from said newspaper , was
published in said newspaper , and in
the regular and entire issue of
every number thereof ,
once a week for 1 November 27, 1991
successive weeks ; that said notice
was so published in said newspaper STATE CF GDLORAM) 'SS
proper and not in any supplementCOUNTY OF WOW) ,
thereof , and that the first The Board of County nmm,wmeR of Weld County, Colorado, met in regular session at ti-
Centennial Complex, 915 1Oh Street, Greeley, Colorado on Wednesday, November 20, 1991 at 9:i
publication of said notice as a.m.
aforesaid, was on the There were present at said meeting the following:
r Present_
day Of \�. Lt�`s , ..� 19 + Chairman: Gordon E. Lacy
Chairman Pro-Tem: George Kennedy Excused
Other Commissioners: Constance L. Harbert, C.W. Kirby, W.H. Webster
and the last on the :-2`1 day of Absent:
\r corsthudng all the members thereof.
� ere were also present:
resent:
lg, l
i Clerk to the Board: Donald D. Warden
Canty Attomey: Thomas O. David
_ The presiding officer announced that a public hearing with respect to the Weld County, Colo
t Musts) Development Revenue Bonds (Monfort, Inc. Project) Series 1931 had been held on Nover
Subscribed and swoon to before �' 1991, not publication attached f having �heretoyas published A. The Greeley Tribune, as evidences.
the affidavit of
The following ordinance was introduced, the text of which is as follows:
me this " .dey of •-
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MyComMisSiOne27tinn5,1952-_-
B 1320 REC 02272388 12/16/91 16 : 26 $0 . 00 11/012
F 0908 MARY ANN FEUERSTEIN CLERK & RECORDER WELD CO, CO _-
'Dr lout Netts pine 5
IN W resent fend flu tern ntWMY v a InwN b be rounded for de rP men of the
Part or Ue allowance of de Rarest and ascot**b el mt rt n'eesse7 to YY et nee
ere am mere fund.
ICJ Re terra user Mich the Boom are to be owed p wde Nil in Cergvn sw mown the
gWlat and puY alpn�p ere LKI pent
N Fie rt av+be o wM m
rxe de 2nvevq Agrmrrem aq de Gunn Arnim,x sufficient
it out in v0}Mr b LI other recturient of de Starting Ayenent nu On re-rennin at sums
relmef ton Iw'r.9r nos ta ter if Lin resort
let the Future Apter,,muses lee Comoren to e
oi omhocher, I
Io ote roorercenc of the{ .Corn,, a. ..1 mermen. aA
tams outset
mset to Swum 79-3-12U of the Nt.
`xm 5. in fort mss.v9 pmecwe. of the GPet ton -:_--.-. •e +see Irc Pu4
P,r_Sv c m am cc enentry 4Pemem n.tM:e c _ -T✓ eery soil
-ir9 ',se e o t r 'e 5n . n r of
n_ .. cogent. +. vc 8avtl d Lab Cu-•Cleru•�_ _ -copy Gun
;son
cunt-. es a r ennherui,
to a cone
i Wired meth
Corms ben by au orsM mid w b _ r sot Frown tho e ied
Lo affx re de Cord to awl t Attest w do the e CNM b 6:tm^ea r.'eey ar.T^sc xNeErm[IN
Sec N:County rm to ms b tent documents.
Bart.
Lo Scam a Pe from. ma{Nthnthcrowns of the Bout,m De!mn cctued d 'e Way*tench:
and he
N O _- _ _ and they Isme ea wormed.Coup with ache nIs deem ss nl ateN: and the
t— U AnnCR NWLITIO,CLCE O. 1166 Creamy Ban of el Brun of Witty 5 for* 'a hereby drec atl mace nse mate and termer
O CflL W'XE NO.AND Nis�m nth reo Clerk a Bede a d to/mei the Bo 6 Re w aha Oe Yam a the Cash he
5U Bnr.5:G THE , VC.. t rc SEC£ OF S4,100,C00 FALA INDUSTRIAL SEWAGE a heard the b the Boss and b arers the dwttt. tM ytame m be Perm a the
.V O 1:'. 'G fOAT, u0. FP.en C SEXES ACTION
TO FMNOF SEWAGE Wmvn oI d Bow of torus [onmmaen w tee Cdr w m um 4 twuaM
� U I,-.t fW ':.V LRi :lC.' PFirM!A: QAiAM ACI'pe gFEfCFIJRE iACFH: NtotM w by layrmk.
s Csb: t C SE :Ent ME THE SUCH
BOY DF A CLOSAC'!C. CUMPrtS IN Seam),ion die Bondheres
d here w the use h Vr al orowarum
L',.n n tree n concert
the
Li TIU,'SI, BCD N'L 4£AGREEMENT, SLT0 117 S AND CL@G C0.1MES M se tie Untie.
H d County
BaW by wow obese m can'd d u xum'we nn oantttrn tam the
4• = 97,'.RS !.fpawO TO SU t:rMBOWS:AN TO RA NG Ali ELATE OF REVENUES NN vin Unml. The Gunry nose aVvrm die tee and 6srnuum d le Glcal Statement in
�l '2,77 ow al Count TO SUCH BOWS:AND Cowry, CC AN Flthe"Coon {norm 8.F the offering of the Pore'.
O fy] :r£i:.i no JandE of County Cann
d Wee Comb CaaMa n, "Cwmyd, thin he Sets B. Ev y croons of&cue*re lA)l(I of he arils a item Gm d 1� tf aWowig
O 3 la W>'w o.. vq the Wed of me Hone ark flwLLr (the "CAM"1. '¢ natatl seine the the&wE of Canty Larvmssani r th vat em Past art' the Fo,of r�'9 Ne raw+q
ter n Nz Wars d tie re* and Nwnetm n 4're the RoKKt the iblttt a fwxtl e h nPwar d preuoi{morn*rtion of
O a e`cct% Crony a e or ono q roes J.Tale e 'n Cdreb Bribed rea der as rent f de motion the I tens a vasnam ram are the aby we a mucvn and nWatm d
� W Ac 1 f we o- me pvtttu w ;olds more Neaete Iritie b fisrme9 d wtr rented sewage fades de real be tare the al xi by vin assn. r
/1 Sevin 9. M officers d the County slab take al actor n*stormy nN tee M eWaN C/
t—t �IVAGFIS. the Corny a further arumN b the Act to issue N mnae hatls h We tame de Wines b the BON pnn'ase Mreefrem to eHlRNte 16 pmv/a at LHI tee am and al
1:4 S Mnrec tx cost of fwrcim an project anti aeon rwvry v desnbk'n mMmdtl with die M to?name de bona are for aroma wq
O WrE7E15. reseserrtawes of Moffatt, Inc, A Delmont corporation (de "Came"'1, here sere effect te, marraUm and confining the transaction; mMrtBted by ties meet¢, the
U r tented the County to Carts 4stin sewage &pal fY316 of the Cmeaty, exerting of the Geduld Agreement the Laenwre, the Bad Plrlase Atonement, oh FK+iYY Glair'Statement
alenarrni of rep-craven laiGtin, de =union aN rataytat of tsavnmm non and the aE de Offeel Statement, beahq wean Imitation the maroon are
a seater. mnwctin and'o¢wUlm of Nln rested wwsee fa3lks lee"I1eleE").wlrrf Prone hAery of ary Sang Sgarems to be hFertd hooter
N we be Iwax within the Wnm and be dyed In de Curtenho a tdairemy2&nee, sing ad wM the ink are Shen,of the Bones aN to Reid of an mtmns or mats with Ue Intend
ea N7f *tying is weld County. Cdwam Irna al Devebmns Athena Bm6.IMoAmt;Ow Amite)Sens r Mane Sarre or with to Sepew/of Ow Drown or 6&or M nkgw necessary to msaun
1991 n de alyropte principal storm of Ss.1W,000 Cie"BvdC to pm Ile cost d the Anima hue as®r d'Wrest m the%M Iran gms'mme kr Feoerre'kern m ones
N x ax:a irarS. m tweet 21. 1991, the&am d County fgrnwss atlmwd a mokern ewestr9 `'tt'da •
a10.Tle none
d Nis Mgect A pen led tea o Nis poise co Ue Boom t et of
the CarroSec=
1 and mco d the BY6 ct be a an or tomes d tee crane Bo net d f re or
t
C4 µ an Dnnv to frnrc the e P tt,:ant Bart'rcWm B iaerese thereon constitute the debt a NMtecres of Carr wort the
e nearing the
II] •
I;13HE S. Ire Mrm w.il x'sued iW and Nome¢by the Lapp'to owe Jaffrey&IlaveW GmNvn or statutes of the State d ftlrab. te the Crewed the Cowry, ter Coil entre,
r—I a - ricrio^ '.Coderwniern to Pv Ire cost a financing de Prefect keret on the Bonds weaned
s dung m N tad ordnance or n to Bonet the Flamm Atommme the Wave, de Bore MNase
rT Vsre so st.,..r sr tee Project art tenon costs ethere to de ash®tor, ysuanCe and we of lgement the&army Agreement the Pelota/glen'Stateem a the Offical Statues,v am
-ro, ~ other inurement [pauwte Drove rise w a pevtNry Rhin d de Canty ma tlR N against its
1/4D rz :'.ink? sQco rmn:ly mold Ne awane d t e Boras, tM Camaro el nwr 'ono a fiwcdg gam 1*refit u'taxing powers, ma Ual de teach of any agreement amend n this wean, the
.--I H -err,.nn ik.w,nh owning Iw pare,unfgmt tom the peeve of and interest on the ions.the tienane!u®rat. the Wenn.the Bore Purchase Menntc the Gascony Ayeerem,
bns se u nee!niter storms as Kenn aN derein;corded:the the Rebeary CABS Statement or the nlfne Statement v art Win 'momma name ary.
---af W •n4P"5. the corms of the wege of arel nwrmt. ea le:gembeee le -re eery nib Loon the Wlb w a dart apdal I¢ were mei or apart as*auto pwepsr
Hamm__ 'a.____�_.
11 E'1 A U pubic
canted*ne"vember ):atl - ee Cwu Hwa a paver m-pyowt the its went
the Pr m Moores sorters am ow d the
e-1
U) Rime 0A.. tee weld Iravno tree's a Iasnnn 1J, mfir o e etRl to Ih Boom and rd mn d Narra9 the Rpin4 v pawn a wow the R*ee sl a teem m e an tamer.
(yj mum o'ov.M all�nmresW mniaak a eawMk 2wlldb b<mm Ib Lenz.tM asN ad ra shat de Lung mason ay tart p'
WA nn•r 5. an rre proposed'matte of the Bones by Nis Carry pursuant to the M to finance Nis Mon, Iw the Reject v mTrht a am baler other peen to the Reece •
CO ea :nee e.,o Seal 11.AM mry a Ne Beat or wed. W made slat be ax torso erewlade wN St
CO W 9•.10..1:., dem have*en preened to the Bead of Comb Cmaesiaea:11th de pmxN tarn the Pena Nal Iwe been fully mtl,waged and*widget.
M v. •rc*Cost rr elm as dI NenrNn 15. leiw Ids ^Fetucy as of Hove er 15, be myth p aedm:m'r2. if am section, a Ue'puw5y v r mini.
of tth m�ucvn.shall or a met on be
N L"vrr,IJ the wooed Ian of lttlmwre of inat mwd u of hbLtreer 15,tortMew be
r '"`tl '1 Lenten the Canty and Affirmed Named Bart - Greeley, as ;lun a Ph a pawn shall nth affect aft/of Ole runny pow's of up steps.
E-- cZt t.}e ompw!f form of&N Purchase Agreement dated November 2(r,1993(de"Bored Scan 13, Al Inesro;uM resort= are Comae re a'a thereof of the Cony
N 7j E .nl") .mpg the County,, the Lmavb, to Guarantor are to UKenmtes ta de era
r vstent herewith and milt the dwm uts herebyherebya artroved teeth repealedrepealedb Ole extent aro of
N 4 +^.rc fo-nof Guaranty Agreement dated as of November 15. 1991(the "Guaranty Agreement") such konsetenry. inks repealer sore not be chntned as mean ay byaw, over, resolution or
O riser the Comas and the iwwe, 151 the Pelrorary ORS Swtenenl mud November 11, nadaee m tan theme.
>"1Toll re try price Saunte 1 are He the proposed Ion of furl Olcal Stme ent dated Sam 14. His wont inmaaury on its fret passage and annum. slot be numbered and
U C4 ,±ter It 'WI(the"Once Stabmenr'). mewed n the pdmrse Book N Pe Cant wept for that arryre,amemuud*de screwy d
iZ ,OW TIFTI Yto ten relila\C=..6y THE BOWER'030aTV INr01D9Wp]6 Go%EU,COI/NM W.: de tl®man d the Board d twltY WmRuae3 Ya by Caere b de Pad are yolk mike of
ai m of 1. N arum tat the and with rs pr the C d Ws tmavee dRt�llong b de h atro'c lend qoa*pC County
'n The New News,a to tre B d geed dvdadm oki
f
2etT [I Gnnn Lmmtvwen and JrNe officers d the County Aeeud baud the fiwug d Nis Ne Canty.
Pe:•a ane to ''race and rile of the Bons therefor be, and the are 's *rosy, rained, Strewn 15.Becalm the Reject we be*erne Le the Canty ate its eVetmms and bore it is
O C R sworn*aN codwmN. p®ble the Batts mq riot*ape w e erred as tax enemy boom alter Decmm.31, 1991,a0
COI 40 Scorn 2. The Cumb Cal fiance the cost of the ggect, rafts-Cm the Pods Mom de merRny t declared to exist. this t3v¢ -s *aired to be ernenatey recesvry for die
fin) al xn of be Rnittl and retaretoolcos a'isenW to the mUanbn, Mace ad sale of n Me peenion d the m[Lc heart,, tcMy and vlety, ad dins *Jura shall be in lull force ad
i--I O Ea.r.he nn re Ue precede ire Bands to 42 Convoy A x¢Mra nth de promva of th elect am Pautos.
Trarso sent IvW outpaces deswted mane. The ame are Itgvq Pdwce was,en AbLL.WM irate ad wvM1d,bkaW by de'Grown;
PI Dot Snotn3. To mine le Cal of the Project trees at Ne Bonds during the°mouton of the we m the XM LW'of Norman,1991.
hron.art ecott acts income to Me aMawtpr. &sutra and sale of the Bores, 'a there hero/ ATTEST:Nand O.Waxen
�:N o.iena-. name an e f ' s Her rue Born, there e*sword and[Math at rm ssue d Weld Comb Clerk in the Board
n [tar k!'n,mY. Ll emo Imwwl Oeve4mm Neveraa Poem IMmlm. ha. Br GN D.Euro,
n(Pns's ii an d 54,100,000 mark m forty regimen Rum Cher b Nis Bore
m rna emus
r ..r n :I m the{wpraMu inaRi ^tared dorsal, mud c mwatl m le AARMAD AS i0 fbiFt TMnas O.Lard
-e r 72. The
Datable xmuvuey m t the 15 aof Rr5 perc 15 r Wash Attorney
.. Jcm 15 lit2. l5.Boom sm1 by Merest be the nor d 6.)5 cemott per S1ND OF COUNTY CW'MGSIXaFI✓5
r., -.. r ,_r .t Rt.m.en 03, 2101. The riBouts
th aw be pet fo seta a WFllt rtu:rfv,C0.0AAD0
, - .tutu > ora P l e Ipm as t fore n the Indenture, War E-,....T..r>°w.rwrtr
P re fit+ lnnual sl¢I h eof b IR cat.Mte, a fr MAb ateale Croce
o:dhee sera.e{sore IhnM pmt ace`s ieetBo from 4 ate Cho Co-ounce
L y.Ha en
:, - c_,. . v .cc M tut, decal_IM1e at t tyres I rare norm the B>t. Wiry mm W.Ken L Kvbn
. n--r.s* 0on o be&ig peccml etifl new ¢ hose etneM rA 'm due GW. Web
+� •r n m the Poe. W.H. Cr
Score h Tr. av'torus x Hneq hale n accpmu told$ahem P STATE CrCf COLORADO
S
9 113.Co ::A w,x...n....*
.vd QiI, D a DFl➢1 s
+'.. r. .,.s I,>a de tart W of ad:M Herein m the Bhet a as ) Lead D.Warden. die Nh ushM ad y,crag Qe SO Ie Piwb d tawny Wmrttvnen hue
'•91.T d Wetl Corny C°4an Oh"Canty,"nth m hereof rnvrY one
n.. 1.TN Vng Ives tenMM 1 to 8. :rrsm a are rmeert cwt of :he
N-ctS¢ Stare td* crecutare d Con Qrg of we PmN Suet. ad bas a as oMJ rests d ve er 2 Rd at N91. s
r,... o .... - e Foot frames Curate 915 :e asf die Gbab, m or ors November in
10. ts,
.•s•e. - ono s Foote-rent ro81_5roamed n the teww drm an d Nis *owe d d the Lorry -, n my oH[e tad
'PP Or 5 CrS-L 3 S2A atio ream de e,M ion a Laren m even sin; de erntreeingC nom awn tau ab end are
�x:3 - 76.753.0 .tors dean once urea tan of it mop mtvq cowed des Vent
�•n 276.75h.CO 2.he Pubinew etaotice d rut {torten d en a.m..pens. leC n :o emcNanests tam puY91,a c in
+5 s`.':0 a-0- 6.750.03 flue rand News, i ewe d bertrd wrutm In toe Copt•B.
fbrtneer 7,1991,a teas
lotT
.T6.:JS9 0 76.)'2)0 d tee and.*d HEREOF, Thereof bent se led keno re trentShe B.
roe Zile 713 0 3-0- V6.70DJ N WIRE4 WHEREOF, RLe knumu tat m/Mtl are Shed Ile not of Me County dh tiM
19(11 2iril't1.W S-0- 276,75.0 LfiY&N.nmus:dUl'" Rine D.Wain
DRS ::6.iW_0 S-O- 76,)50.0 Qi1 m the Boyd
ray0 26.7'i.0 S 0- D6,.2.O
�1 ZI6)'t0 $7,:0,WJ <jJ6.)r2.0 CgRU
RNdad:,The tane News iw,mm n. 1991.
NEW ISSUE — Book-Entry Only RATING: Moody's "Baal"
(See "Rating" herein)
In the opinion of Sherman & Howard, Bond Counsel, assuming continuous compliance with certain
covenants described herein, interest on the Bonds, except for interest on any Bond for any period during which
it is held by a "substantial user"of the facilities financed with the Bonds or a "related person"as such terms are
used in Section 147(a) of the Internal Revenue Code of 1986, as amended (the "Code"), is not included in gross
income under present federal income tax laws pursuant to Section 103 of the Code; however, interest on the
Bonds is an item of tax preference for purposes of calculating alternative minimum taxable income as defined in
Section 55(6)(2) of the Code under present federal income tax laws. Interest on the Bonds is not included in
Colorado taxable income or Colorado alternative minimum taxable income under present Colorado laws. See
"TAX EXEMPTION" herein.
$4,100,000
WELD COUNTY, COLORADO
Industrial Development Revenue Bonds
(Monfort, Inc. Project)
Series 1991
Due: December 15, 2001
Dated: November 15, 1991 Interest Rate: 6.75%
Price: 100%
(Plus Accrued Interest)
•
Interest on the Bonds is payable on June 15 and December 15 of each year,commencing on June 15, 1992.The
•
Bonds will be issued solely as fully registered bonds in denominations of$5,000 principal amount,or any integral
multiple thereof pursuant to an Indenture of Trust between the Issuer and Affiliated National Bank—Greeley,
Greeley, Colorado. The Bonds will be delivered in book-entry form and will be registered in the name of Cede &
Co.,as nominee for The Depository Trust Company,New York,New York,which will act as securities depository
for the Bonds. The purchasers will not receive certificates representing their ownership interest in the Bonds
purchased. See "THE BONDS — Book-Entry System." It is expected that the Bonds in definitive form will be
available for delivery to the Depository Trust Company, New York, New York on or about December 20, 1991
against payment therefor.
The Bonds are not subject to optional redemption prior to maturity except upon the occurrence of limited
events as described herein.The Bonds are subject to mandatory redemption upon the occurrence of certain events
as described herein.
The Bonds are payable (except to the extent payable from Bond proceeds and certain other moneys pledged
therefor) solely from and secured by a pledge of payments to be made under a Financing Agreement between the
Issuer and
MONFORT, INC.
The Bonds are further secured under a Guaranty Agreement by
CONAGRA, INC.
The Bonds are special limited obligations of Weld County,Colorado(the "Issuer"), and shall never constitute
the debt or indebtedness of the Issuer within the meaning of any provision or limitation of the Constitution or statutes
of the State of Colorado or the home rule charter of the Issuer, and shall not constitute nor give rise to a pecuniary
liability of the Issuer or a charge against its general credit or taxing powers.
The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approval of
validity and certain other matters by Sherman & Howard, Denver, Colorado, Bond Counsel, and certain other
conditions. Certain matters will be passed on for the Underwriter by their counsel, Kutak Rock & Campbell,
Denver, Colorado. Certain legal matters relating to the Issuer will be passed on for the Issuer by Thomas O.
David, Esq., County Attorney.
ap PIPER,MEW&HOPWOOD
Official Statement dated November 20, 1991
1(
i' _ .
No person has been authorized to give any information or to make any
representations other than those contained in this Official Statement in
connection with the offers made hereby and, if given or made, such information
or representations must not be relied upon as having been authorized by Weld
County, Colorado, or the Underwriter. Neither the delivery of this Official
Statement nor any sale hereunder shall under any circumstances create any
implication that there has been no change in the affairs of Weld County,
Colorado, Monfort, Inc. or ConAgra, Inc. since the date hereof. This Official
Statement does not constitute an offer or solicitation in any jurisdiction in
which such offer or solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so or to any person
to whom it is unlawful to make such offer or solicitation. The information
set forth herein has been obtained from Monfort, Inc. , ConAgra, Inc. and other
sources which are believed to be reliable, but it is not guaranteed as to
accuracy or completeness by, and is not to be construed as a representation
by, the Underwriter.
TABLE OF CONTENTS
Page
INTRODUCTORY STATEMENT 1
THE ISSUER 2
NATURE OF BONDS AND SOURCE OF PAYMENT 2
THE BONDS 3
THE PROJECT AND USE OF PROCEEDS 6
THE FINANCING AGREEMENT 7
THE GUARANTY AGREEMENT 16
THE INDENTURE 19
UNDERWRITING 30
TAX EXEMPTION 30
RATING 32
APPROVAL OF LEGAL PROCEEDINGS 32
APPENDIX A--ConAgra, Inc. Fiscal 1991 Annual Report to Stockholders and
Quarterly Report on Form 10-Q for the quarter ended
August 25, 1991 A-1
-i-
SUMMARY STATEMENT
This Summary Statement is subject in all respects to more complete
information contained in this Official Statement. The offering of the Bonds
to potential investors is made only by means of this entire Official
Statement. No person is authorized to detach this Summary Statement from this
Official Statement or to use it otherwise without this entire Official
Statement. Capitalized terms used in this Summary Statement shall have the
meanings ascribed to them in this Official Statement.
Issuer: Weld County, Colorado, a county and
political subdivision of the State of
Colorado.
Bonds: $4,100,000 aggregate principal amount of
Industrial Development Revenue Bonds,
Series 1991, maturing on December 15,
2001. Issuable solely as fully registered
bonds in denominations of $5,000 or any
integral multiple thereof and delivered in
book-entry form.
Interest on the Bonds: The Bonds will bear interest at a rate of
6.75% per annum. Interest on the Bonds is
exempt from federal income taxation under
present federal income tax laws. Interest
will be payable semiannually on each
June 15 and December 15, commencing on
June 15, 1992. Interest on the Bonds is an
item of tax preference for purposes of
calculating alternative minimum taxable
income under the Code.
Use of Bond Proceeds: The net proceeds of the Bonds will be
loaned by the Issuer to Monfort, Inc. , a
wholly—owned subsidiary of ConAgra, Inc. ,
pursuant to a Financing Agreement and,
subject to certain conditions described
more fully in the Financing Agreement, will
be available to finance the cost of a
sewage disposal facility project consisting
of the expansion of pretreatment
facilities, the acquisition and
installation of transmission mains and the
acquisition, construction and installation
of other related sewage facilities.
Security for the Bonds: The Bonds are special limited obligations
of the Issuer and are payable solely from
revenues and receipts derived from the
-ii-
Financing Agreement as authorized by
Article 3, Title 29 of Colorado Revised
Statutes, as amended (the "Act") and
provided in the Financing Agreement and in
the Indenture, and from the other security
pledged by the Financing Agreement and
under the Indenture. In addition, the
timely payment of principal and interest on
the Bonds is guaranteed by ConAgra, Inc.
pursuant to the Guaranty Agreement.
Redemption: The Bonds are subject to mandatory
redemption in the case of a casualty event
or if the Bonds become taxable, as
described in "THE BONDS--Redemption of
Bonds."
The Bonds are special limited obligations of the Issuer and are payable
solely from the income, revenues and receipts as provided in the Financing
Agreement and Indenture. The Bonds do not constitute the debt or indebtedness
of the Issuer, the State of Colorado or any county, municipality or political
subdivision of the State of Colorado; and the Bonds do not constitute or give
rise to any pecuniary liability of, or a charge against, the general credit or
taxing powers of the Issuer, the State of Colorado or any county, municipality
or political subdivision of the State of Colorado.
-iii-
[THIS PAGE INTENTIONALLY LEFT BLANK]
OFFICIAL STATEMENT
$4,100,000
WELD COUNTY, COLORADO
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(Monfort, Inc. Project)
Series 1991
INTRODUCTORY STATEMENT
This Official Statement is furnished in connection with the offering of
$4,100,000 aggregate principal amount of Industrial Development Revenue Bonds
(Monfort, Inc. Project) Series 1991 (the "Bonds") of Weld County, Colorado
(the "Issuer") .
The Bonds are being issued pursuant to an Indenture of Trust dated as of
November 15, 1991 (the "Indenture") between the Issuer and Affiliated National
Bank-Greeley, Greeley, Colorado (the "Trustee") .
The Bonds are being issued to provide funds for the financing of the cost
of a sewage disposal facility project consisting of the expansion of
pretreatment facilities, the acquisition and installation of transmission
mains and the acquisition, construction and installation of other related
sewage facilities, to be located within the corporate boundaries of the Issuer
(the "Project") , which Project will be owned by Monfort, Inc. , a Delaware
corporation (the "Company") . See "THE PROJECT AND USE OF PROCEEDS" herein.
Pursuant to a Financing Agreement dated as of November 15, 1991 (the
"Financing Agreement") between the Issuer and the Company, the Issuer will
loan the proceeds of the Bonds to the Company for the purpose of financing,
acquiring, constructing, equipping and installing the Project.
The Bonds will be payable solely (except to the extent payable from Bond
proceeds and certain other moneys pledged therefor) from and secured by a
pledge of certain revenues and other amounts to be received by the Issuer
pursuant to the Financing Agreement, which are designed to be sufficient to
pay, when due, the principal of and interest on the Bonds. Pursuant to a
Guaranty Agreement dated as of November 15, 1991 (the "Guaranty Agreement")
between ConAgra, Inc. (the "Guarantor") and the Trustee, payment of the
principal of and interest on the Bonds will also be secured by the
unconditional guaranty of payment by the Guarantor.
Brief descriptions of the Issuer, the Project, the Bonds, the Financing
Agreement, the Indenture and the Guaranty Agreement are included in this
Official Statement, and information regarding the Guarantor is attached hereto
as Appendix A to this Official Statement. Such descriptions do not purport to
be comprehensive or definitive. No description of the Company is provided
herein since the Company is wholly-owned by the Guarantor. All references
herein to the Financing Agreement, the Indenture and the Guaranty Agreement
are qualified in their entirety by reference to such documents, and references
herein to the Bonds are qualified in their entirety by reference to the form
thereof included in the Indenture and the information with respect thereto
included in the aforementioned documents, copies of all of which are available
for inspection in the principal office of the Trustee. During the period of
the offering, copies of such documents will also be available from James
Manire at the Denver, Colorado office of Piper Jaffrey & Hopwood, Inc.
THE ISSUER
The Issuer is a county duly organized and existing as a political
subdivision of the State of Colorado (the "State") under the Constitution and
laws of the State.
Pursuant to the County and Municipality Development Revenue Bond Act,
Article 3, Title 29, Colorado Revised Statutes 1973, as amended (the "Act"),
and the home rule charter of the Issuer, and pursuant to an ordinance adopted
by the Issuer, the Issuer is authorized and empowered to issue the Bonds, to
loan the proceeds thereof to the Company for the purpose of financing,
acquiring, constructing, equipping and installing the Project and to secure
the Bonds by a pledge of the amounts payable by the Company under the
Financing Agreement and to enter into the Financing Agreement and the
Indenture.
The Bonds shall never constitute the debt or indebtedness of the Issuer,
the State or any other municipality, county or political subdivision of the
State within the meaning of any provision or limitation of the Constitution or
statutes of the State or of the home rule charter of the Issuer or any other
political subdivision of the State; and the Bonds shall not constitute nor
give rise to any pecuniary liability of, or charge against the general credit
or taxing power of, the Issuer, the State or any political subdivision of the
State.
THE ISSUER HAS NOT PARTICIPATED IN THE PREPARATION OF THIS OFFICIAL
STATEMENT AND THE ISSUER ASSUMES NO RESPONSIBILITY WITH RESPECT TO THIS
OFFICIAL STATEMENT.
NATURE OF BONDS AND SOURCE OF PAYMENT
The Bonds will be special limited obligations of Weld County, Colorado
and will be payable solely from and secured by a pledge of certain amounts
derived from payments by the Company under the Financing Agreement (except to
the extent payable from Bond proceeds and certain other moneys pledged
therefor) . Under the Indenture, the Issuer will pledge and assign all its
right, title and interest in and to the Financing Agreement and all revenues
-2-
and receipts payable thereunder (with certain exceptions) , to the Trustee for
the benefit of the holders of the Bonds.
Pursuant to the Guaranty Agreement, the payment of the principal of and
interest on the Bonds will also be secured by a guaranty, whereby the
Guarantor has unconditionally guaranteed payment of the principal of and
interest on the Bonds.
THE BONDS
General Description
The Bonds shall be dated as of November 15, 1991 and shall bear interest
from their date payable semiannually on June 15 and December 15 of each year,
commencing June 15, 1992. The Bonds will bear interest at the rate set forth
on the cover page hereof. Principal of and interest on the Bonds will be
payable by check of the Trustee to the registered owner thereof. Payment of
principal of and interest on the Bonds is guaranteed by the Guarantor pursuant
to the Guaranty Agreement.
Book-Entry System
The Bonds will be delivered in book-entry form and the Bonds will be
registered in the name of Cede & Co. , as nominee for the Depository Trust
Company ("DTC") . DTC is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
DTC holds securities and facilitates the clearance and settlement of
securities transactions through electronic book-entry changes in accounts of
the DTC Participants, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some
of which (and/or their representatives) own DTC. Access to the DTC system is
also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with DTC
Participants, either directly or indirectly.
DTC Participants will be credited in the records of DTC with the amount
of such DTC Participants' interests in the Bonds. Beneficial ownership
interests in the Bonds in the principal amount of $5,000, or any integral
multiple thereof, may be purchased by or through DTC Participants. The owners
of the Bonds will not receive certificates representing their beneficial
ownership interests. The ownership interest of each owner will be recorded
through the records of the DTC Participant from which such owner purchased its
Bonds. Transfers of ownership interests in the Bonds will be accomplished by
book entries made by DTC and, in turn, by DTC Participants acting on behalf of
owners. It is anticipated that each owner will receive a written confirmation
of the ownership interest acquired by such owner in the Bonds from the person
or entity from whom such ownership interest is acquired.
-3-
With respect to Bonds registered in the name of Cede 6 Co. , the Company
and the Trustee shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an
interest in the Bonds, all as provided in the Indenture. Owners may desire to
make arrangements with a DTC Participant so that all notifications of all
interest payments and other communications to DTC which affect such owners
will be forwarded in writing by the DTC Participants.
After initial issuance of the Bonds, the Bonds may not thereafter be
transferred or exchanged except:
(1) to any successor of DTC or its nominee, which successor must be
a qualified and registered "clearing agency" under Section 17A of the
Securities Exchange Act of 1934, as amended; or
(2) upon the resignation of DTC or a successor or new depository
under paragraph (1) above, or a determination by the Issuer that DTC or
such successor or new depository is no longer able to carry out its
functions, and the designation by the Issuer, with the consent of the
Trustee, of another depository institution acceptable to the depository
then holding the Bonds, which new depository institution must be a
qualified and registered "clearing agency" under Section 17A of the
Securities and Exchange Act of 1934, as amended, to carry out the
functions of DTC or such successor or new depository; or
(3) upon the resignation of DTC or a successor or new depository
under paragraph (1) or paragraph (2) , or a determination by the Issuer
that DTC or such successor or new depository is no longer able to carry
out its functions, and the failure by the Issuer after reasonable
investigation to locate another qualified depository institution under
paragraph (2) to carry out such depository functions; or
(4) upon the determination by the Issuer, at the written direction
of the Company, that it is in the best interest of the beneficial owners
that they be able to obtain Bond certificates and the delivery by the
Issuer of written notice thereof to the Trustee or upon the receipt by
the Trustee of written notice from DTC participants having interests of
not less than soo of the principal amount of the Bonds outstanding, as
shown on the records of DTC, as certified by DTC, that it is in the best
interest of the beneficial owners that they be able to obtain Bond
certificates.
In the case of a transfer to a successor of DTC or its nominee as
referred to in paragraph (1) above or designation of a new depository pursuant
to paragraph (2) above, upon receipt of the outstanding Bonds by the Trustee,
together with written instructions for registration of transfer satisfactory
to the Trustee, a new Bond shall be issued to such successor or new
depository, as the case may be, or its nominee, as is specified in such
written transfer instructions. In the case of a resignation or determination
under paragraph (3) above and the failure after reasonable investigation to
_4_
locate another qualified depository institution for the Bonds as provided in
paragraph (3) above or in the case of any event described under paragraph (4)
above, and, in either case, upon receipt of the outstanding Bonds by the
Trustee, together with written instructions for registration of transfer
satisfactory to the Trustee, new Bonds shall be issued in the denominations of
$5,000 or any integral multiple thereof, as provided in the Indenture
registered in the names of such persons, and in such denominations as are
requested in such written transfer instructions; provided, however, the
Trustee shall not be required to deliver such new Bonds within a period of
less than sixty days from the date of receipt of such written transfer
instructions.
Redemption of Bonds
The Bonds shall be redeemable in whole by the Issuer, at any time at the
direction of the Company, at a redemption price equal to 1000 of the principal
amount thereof plus accrued interest thereon to the redemption date if all or
substantially all of the Project shall have been damaged or destroyed or there
occurs condemnation of all or substantially all of the Project or the taking
by eminent domain of such use or control of all or a portion of the Project as
in each case renders the Project unsatisfactory to the Company for its
intended use and the Company has elected, as expressed in a certificate
delivered to the Trustee within 120 days after the occurrence of such event
(or with respect to condemnation or eminent domain proceedings within 120 days
from the date of a final order which is no longer subject to appeal), to
prepay the Loan.
The Bonds shall be subject to mandatory redemption by the Issuer, at a
redemption price equal to 100% of the principal amount thereof plus accrued
interest to the redemption date, on the 180th day (or such earlier date as may
be designated by the Company) after a final determination by a court of
competent jurisdiction or an administrative agency, to the effect that the
interest payable on the Bonds is includible for federal income tax purposes in
the gross income of the registered owners thereof, other than any registered
owner who is a "substantial user" of the Project or a "related person" within
the meaning of the Internal Revenue Code of 1986, as amended. No
determination by any court or administrative agency shall be considered final
unless the Company shall have been given written notice and, if it so desires,
has been afforded an opportunity, at its expense, to contest any such
determination, either directly or through a registered owner, to a degree it
deems sufficient or until the conclusion of any appellate review of such
determination or the expiration of the time for seeking such review.
Notice of Redemption
Except as otherwise provided in the Indenture, Bonds shall be called for
redemption by the Trustee upon receipt by the Trustee at least 45 days prior
to the redemption date of a certificate of the Company specifying the
principal amount of the Bonds to be called for redemption, the redemption
price and the provision of the Indenture pursuant to which such Bonds are to
be called for redemption. The Trustee shall cause notice of any redemption to
be given by mailing a copy of the redemption notice by first-class mail to the
registered owners of Bonds at their addresses as the same shall last appear
upon the registration records not more than 45 nor less than 30 days prior to
-5-
such redemption date. Failure to give such notice to the holder of any Bond
designated for redemption, or any defect therein, shall not affect the
validity of the proceedings for the redemption of any other Bonds.
Each notice of redemption shall specify the date fixed for redemption,
the principal amount of Bonds to be redeemed, the redemption price, the place
or places of payment, that payment will be made upon presentation and
surrender to the Trustee of the Bonds to be redeemed, that interest accrued to
the date fixed for redemption will be paid as specified in said notice, and
that on and after said date interest thereon will cease to accrue.
Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue. At
least three business days prior to the redemption date specified in the notice
of redemption, an amount of money sufficient to redeem all the Bonds called
for redemption at the appropriate redemption price, including accrued interest
to the date fixed for redemption, shall be paid by the Company for the account
of the Issuer to the Trustee for deposit in the Bond Fund. On any redemption
date, the principal amount of each Bond to be redeemed, together with the
accrued interest thereon to such date, shall become due and payable and from
and after such date, notice having been given and deposit having been made, in
accordance with the provisions of the Indenture, then, notwithstanding that
any Bonds called for redemption shall not have been surrendered, no further
interest shall accrue on any of such Bonds. From and after such date of
redemption (such notice having been given and such deposit having been made)
the Bonds to be redeemed shall not be deemed to be outstanding under the
Indenture, and the Issuer shall be under no further liability in respect
thereof.
THE PROJECT AND USE OF PROCEEDS
The Project will consist of sewage facilities to be located within the
corporate boundaries of the Issuer which Project will be owned by the
Company. Proceeds of the Bonds will be used to finance the cost of a sewage
disposal facilities project consisting o£ the expansion of pre-treatment
facilities, the acquisition and expansion of transmission mains and the
acquisition, construction and installation of other related sewage
facilities.
The proceeds of the Bonds are anticipated to be used as follows:
Waste Water Pretreatment Facility $3,856,500
Sewer connections
• Corporate offices at 11th Avenue and
"0" Street 35,000
• Laboratory located at 650 "0" Street 160,000
• Corporate and Transportation offices
at 1900 "AA" Street 270,000
• Bond Issue Costs 82,000
• Capitalized Interest 28,500
$4,432,000
Less amounts financed by the Company 332,000
$4,190,000
-6-
THE FINANCING AGREEMENT*
The following is a summary of certain provisions of the Financing
Agreement.
Issuance of the Bonds
Agreement to Issue Bonds; Application of Bond Proceeds. In order to
provide funds to make the Loan, the Issuer will sell and cause to be delivered
to the initial purchaser thereof the Bonds and will deposit the proceeds
thereof (net of underwriting discount) as follows:
(a) In the Bond Fund an amount equal to the accrued interest, if
any, paid by the initial purchaser of the Bonds.
(b) In the Construction Fund the balance of the proceeds received
from such sale.
Disbursements From the Construction Fund. The Issuer has, in the
Indenture, authorized and directed the Trustee to make payments from the
Construction Fund to pay the Cost of Construction. Each payment of the Cost
of Construction shall be made upon receipt by the Trustee of a requisition
signed by the Company Representative and stating (i) the requisition number,
(ii) the name and address of the person, firm or corporation to whom payment
is due or was made, (iii) the amount to be paid, (iv) that none of the items
for which the payment is proposed to be made has formed the basis for any
payment theretofore made from the Construction Fund, (v) the nature of each
item for which payment is proposed to be made and that such item is or was
reasonable and necessary in connection with the Project and is a proper charge
against the Construction Fund and (vi) a statement that every general
contractor has filed with the Company receipts or waivers of liens by
subcontractors for all amounts theretofore certified for payment for work,
materials and equipment furnished by such subcontractor. Upon request of the
Trustee, the Company Representative will furnish the receipts or waivers of
liens specified in clause (vi) above. The Company will not submit or permit
to be submitted any requisition to the Trustee which, if paid, will cause less
than 950 of the net proceeds of the Bonds (including any moneys realized from
investment of such proceeds) to be used for the acquisition, construction,
reconstruction or improvement of sewage facilities within the meaning of the
Code. The Company also agrees that not more than 2% of the face amount of the
Bonds will be used for the payment of "issuance costs" within the meaning of
the Code.
* All capitalized terms used herein, not otherwise defined in this Official
Statement or under this Section, have the meanings as specified in the
Financing Agreement.
-7-
Establishment of Completion Date. The Completion Date shall be evidenced
to the Trustee by a certificate signed by the Company Representative stating
that, except for amounts retained by the Trustee for any amount of the Cost of
Construction not then due and payable, (i) acquisition, construction and
installation of the Project has been completed in accordance with the Plans
and Specifications and all labor, services, materials and supplies used in
such acquisition, construction and installation have been paid and (ii) all
other facilities necessary in connection with the Project have been acquired,
constructed and installed in accordance with the Plans and Specifications and
all costs and expenses incurred in connection therewith have been paid.
Payment by Company if Construction Fund Insufficient. The Issuer does
not make any warranty, either express or implied, that the moneys which will
be paid into the Construction Fund will be sufficient to pay all the Cost of
Construction. In the event the moneys in the Construction Fund available for
payment of the Cost of Construction should not be sufficient to pay the Cost
of Construction in full, the Company shall pay that portion of the Cost of
Construction in excess of the moneys available therefor in the Construction
Fund. If the Company pays any portion of the Cost of Construction due to an
insufficiency in the Construction Fund, it shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or from the holders of any
Bonds, nor shall it be entitled to any diminution in or postponement of the
Loan Payments or other payments required to be made under the Financing
Agreement.
Plans and Specifications. The Plans and Specifications are on file with
the Company. The Company may revise the Plans and Specifications at any time
prior to the Completion Date, provided that in the case of a material change
the Company Representative shall certify to the Trustee and the Issuer that
the Project provided for by the revised Plans and Specifications will
constitute a "project" under the Act and will not impair the exclusion of
interest on the Bonds from gross income for federal income tax purposes.
Company to Pursue Remedies Against Contractors and Subcontractors and
their Sureties. In the event of breach of warranty with respect to any
material, workmanship or performance guarantee, the Company will promptly
proceed either separately or in conjunction with others to exhaust the
remedies of the Company against the contractor, subcontractor or supplier so
in default and against each surety for the performance of such contract. Any
amounts recovered by way of damages, refunds, adjustments or otherwise in
connection with the foregoing (i) shall be paid to the Company if the Company
has corrected, at its own expense, the matter which gave rise to such default
or breach, or (ii) if the Company has not corrected, at its own expense, the
matter which gave rise to such default or breach, shall be paid into the
Construction Fund, net of legal fees, unless recovered after full disposition
of the Construction Fund, in which case they shall be paid into the Bond Fund.
-g-
•
Agreement as to Ownership and Use of the Project. Except as otherwise
permitted by law, the Issuer covenants it will not take any action to
interfere with the Company's ownership of the Project or to prevent the
Company from having possession and enjoyment of the Project during the term of
the Financing Agreement, except as otherwise provided therein. The Company
agrees to use its best efforts to utilize and maintain the Project in such
manner as to conform with all applicable zoning, planning, building,
environmental and other regulations of all governmental authorities having
jurisdiction over the Project.
Investment of Moneys. All moneys held as a part of the Funds and the
Rebate Fund shall be invested by the Trustee as provided in the Indenture.
Tax Covenant. The Company covenants for the benefit of the holders of
the Bonds that it will not take any action or omit to take any action with
respect to the Bonds, the proceeds thereof, any other funds of the Company or
any facilities financed with the proceeds of the Bonds if such action or
omission would cause the interest on the Bonds, except for interest during any
period during which any Bond is held by a "substantial user" of the Project or
a "related person" as such terms are used in the Code, to lose its exclusion
from gross income for federal income tax purposes under the Code. The
foregoing covenant shall remain in full force and effect notwithstanding the
payment in full or defeasance of the Bonds until the date on which all
obligations of the Company in fulfilling the above covenant under the Code
have been met.
Term of Financing Agreement
and Installment Payments
The Financing Agreement shall remain in full force and effect until such
time as all of the Bonds and all fees and charges of the Trustee have been
fully paid or provision made for such payment.
The Company agrees to repay the loan as follows:
(a) Until the principal of and interest on the Bonds shall have
been paid or provision for the payment thereof shall have been made in
accordance with the Indenture, the Company shall pay as and for repayment
of the Loan to the Trustee for the account of the Issuer, for deposit in
the Bond Fund on or before the third Business Day prior to each Interest
Payment Date, an amount sufficient to pay the amount of principal and
interest which will become due on the Bonds on the next succeeding
Interest Payment Date for the Bonds then outstanding, provided, however,
that any amount, whether from the proceeds of the Bonds or otherwise, in
the Bond Fund at the opening of business of the Trustee on the third
Business Day prior to each Interest Payment Date shall be credited
_g_
against the payment due on such date. Additionally, the Company agrees
to pay as repayment of the Loan to the Trustee for the account of the
Issuer on or before the third Business Day prior to any date on which
Bonds are to be redeemed during the term of the Financing Agreement a sum
which, together with other moneys available therefor in the Bond Fund at
the opening of business of the Trustee on the third Business Day prior to
such redemption date, will equal the principal of and interest on the
Bonds to be redeemed on such date of redemption. Notwithstanding the
foregoing, if on the required payment date prior to any Interest Payment
Date or any redemption date, there is not contained in the Bond Fund the
principal of or interest which will become due on the Bonds on such
Interest Payment Date or redemption date, the Company shall pay into the
Bond Fund, on such required payment date, the amount of such
insufficiency. Any amount credited under the Indenture against any
payment required to be made thereunder shall be credited against the
corresponding payment required to be made by the Company pursuant to this
subsection (a) .
(b) The Company agrees to pay the reasonable and necessary fees and
expenses of the Trustee, as and when the same become due, upon submission
by the Trustee of a statement therefor; provided that the Company may,
without creating a default under the Financing Agreement contest in good
faith the reasonableness of any such fees or expenses.
(c) The Company agrees to pay the Administration Expenses which
have accrued and become payable, upon submission by the Issuer of a
statement therefor.
(d) The Company agrees to pay to the Trustee any amount required to
be paid to the United States of America pursuant to the Code to the
extent amounts on deposit in the Rebate Fund are insufficient for such
purpose.
In the event the Company should fail to make any of the payments required
above, the item in default shall continue as an obligation of the Company
until the amount in default shall have been fully paid, and with respect to
the payments required by (a), (b) and (c) above, the Company agrees to pay the
same with interest thereon, at a rate which shall be, to the maximum extent
permitted by law, 1% above the rate of interest then charged by the Trustee on
90-day unsecured commercial loans to its prime commercial borrowers or at the
rate of interest per annum borne by the Bonds, whichever is higher.
The obligations of the Company to make the payments required by the
Financing Agreement and to perform and observe the other agreements on its
part contained therein shall be absolute and unconditional and shall not be
subject to any defense or any right of set-off, counterclaim or recoupment
arising out of any breach by the Issuer of any obligation to the Company
whether under the Financing Agreement or otherwise, or out of any indebtedness
or liability at any time owing to the Company by the Issuer.
-10-
Maintenance. The Company, at its own expense, will maintain, preserve
and keep the Project in good repair, working order and condition (ordinary
wear and tear excepted) and will from time to time make all proper repairs,
renewals and replacements as its operations require. The Company may also, at
its own expense, make from time to time any additions, modifications or
improvements to the Project, provided such additions, modifications or
improvements do not impair the character of the Project as a "project" within
the meaning of the Act or impair the exclusion of interest on the Bonds from
gross income for federal income tax purposes. All such additions,
modifications and improvements shall become a part of the Project.
Taxes and Other Governmental Charges. The Company will pay promptly, as
the same become due, all taxes and governmental charges of any kind whatsoever
that may at any time be lawfully assessed or levied against or with respect to
the Project; provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period
of years, the Company shall be obligated under the Financing Agreement to pay
only such installments as may become due during the term of the Financing
Agreement. The Company may, at its expense and in its own name and behalf, in
good faith contest any such taxes, assessments and other charges and, in the
event of such contest, may permit the taxes, assessments or other charges
contested to remain unpaid during the period of such contest and any appeal
therefrom.
Insurance. Throughout the term of the Financing Agreement, the Company
will, at its own expense, provide or cause to be provided insurance against
loss of damage to the Project of the kinds and in the amounts customarily
insured against by corporations similarly situated, by such methods, including
self-insurance, as may be deemed adequate by the Company.
Use of Net Proceeds. Unless the Company has exercised its option or is
required to prepay the Loan in whole, if the Project is destroyed or damaged
by fire or other casualty, the Company will promptly repair, rebuild or
restore the property damaged or destroyed to substantially the same condition
as it existed prior to such damage or destruction, with such changes,
alterations and modifications as may be desired by the Company and as will not
impair the character or the Project as a "project" within the meaning of the
Act or the exclusion of interest on the Bonds from gross income for federal
income tax purposes, which improvements shall be deemed a part of the Project.
Unless the Company has exercised its option or is required to prepay the
Loan in whole, if title to or temporary use of any part of the Project is
taken under the exercise of the power of eminent domain by any governmental
body or by any person, firm or corporation acting under governmental
authority, the Company will restore the Project by the acquisition of other
improvements suitable for the Company's operations, which improvements shall
be deemed a part of the Project.
-11-
Unless the Company has exercised its option or is required to prepay the
Loan in whole, the Company shall use or cause to be used all Net Proceeds from
any insurance payment or condemnation award received with respect to the
Project to repair, rebuild or restore the Project. Any balance of such Net
Proceeds remaining after payment of all costs of such repair, rebuilding or
restoration shall be paid to the Trustee to be held in a separate trust
account to be applied by the Trustee for the payment of the Bonds on the
maturity or redemption date thereof.
Special Covenants
1. The Issuer makes no warranty, either express or implied, as to the
Project or that it will be suitable for the Company's purposes or needs.
2. The Company agrees that during the term of the Financing Agreement
it will maintain its corporate existence, will continue to be qualified to do
business in the State of Colorado and will not consolidate with or merge into
another corporation or permit one or more corporations to consolidate with or
merge into it or sell or otherwise transfer to another entity all or
substantially all of its assets and thereafter dissolve; provided, however,
that the Company may consolidate with or merge into another corporation or
permit one or more other corporations to consolidate with or merge into it or
sell or otherwise transfer all or substantially all of its assets and
thereafter dissolve if (i) the successor or transferee entity shall be the
Guarantor or a wholly-owned subsidiary of the Guarantor and such corporation
shall be qualified to do business in the State of Colorado and shall assume in
writing all of the obligations of the Company under the Financing Agreement or
(ii) the successor or transferee entity shall be organized and existing under
the laws of one of the states of the United States, shall be qualified to do
business in the State of Colorado, shall assume in writing all of the
obligations of the Company under the Financing Agreement and shall have a net
worth after giving effect to such merger, consolidation or acquisition of
assets at least equal to the net worth of the Company immediately prior to
such merger, consolidation or acquisition of assets. Net worth shall be
determined in accordance with generally accepted accounting principles
consistently applied.
3. The Company will indemnify and hold the Issuer and the Trustee free
and harmless from any loss, claim, damage, tax, penalty, liability,
disbursement, litigation expense, attorney's fee and expense or court cost
arising out of, or in any way relating to, the execution or performance of the
Financing Agreement or the Indenture, the issuance or sale of the Bonds,
actions taken under the Financing Agreement or under the Indenture or any
other cause whatsoever pertaining to the Project or the financing of the
Project; provided, however, that the Company shall have no obligation to
indemnify and hold the Trustee free and harmless pursuant to this Section if
the action or failure to act giving rise to such obligation is a result of the
negligence or willful default of the Trustee.
Assignment. The Financing Agreement may be assigned by the Company
without the consent of either the Issuer or the Trustee, provided that each of
the following conditions is complied with:
-12-
(a) Except as provided in paragraph 2 under "Special Covenants," no
assignment shall relieve the Company from primary liability for any of
its obligations under the Financing Agreement, and in the event of any
such assignment the Company shall continue to remain primarily liable for
payment of the Loan Payments and other payments required to be made and
for performance and observance of the other covenants and agreements on
its part contained in the Financing Agreement.
(b) The assignee shall assume in writing the obligations of the
Company under the Financing Agreement to the extent of the interest
assigned.
(c) The Company shall, within 30 days after the delivery thereof,
furnish or cause to be furnished to the Issuer and the Trustee a true and
complete copy of such assumption of obligations and assignment.
The Issuer shall assign its interest in and pledge any moneys receivable
under the Financing Agreement (except Administration Expenses and certain
other payments) to the Trustee pursuant to the Indenture as security for
payment of the principal of and interest on the Bonds. The Company consents
to such assignment and pledge.
Defaults. The following shall be "events of default" under the Financing
Agreement and the term "event of default" shall mean any one or more of the
following events:
(a) Failure by the Company to pay the Loan Payments required to be
paid under the Financing Agreement and the occurrence of an Event of
Default under the Indenture.
(b) Failure by the Company to pay the amounts required to be paid
as specified in paragraph (d) under "Term of Financing Agreement and
Installment Payments."
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed, other
than as referred to in subsections (a) or (b) above and other than the
covenants specified under "Tax Covenant," for a period of 30 days after
written notice, specifying such failure and requesting that it be
remedied, given to the Company by either the Issuer or the Trustee or
given to the Issuer, the Company and the Trustee by the holders of not
less than 25% in aggregate principal amount of the Bonds then outstanding.
(d) The dissolution or liquidation of the Company or the Guarantor
or the failure by the Company or the Guarantor promptly to lift any
execution, garnishment or attachment of such consequence as will impair
the ability of the Company to continue its use of the Project or of the
Company or the Guarantor to make any payments under the Financing
Agreement or the Guaranty Agreement, as the case may be. The term
"dissolution or liquidation of the Company or the Guarantor" shall not
-13-
be construed to include the cessation of the existence of the Company or
the Guarantor resulting from the dissolution of the Company or the
Guarantor following a transfer of all or substantially all of its assets
permitted by the Financing Agreement or the Guaranty Agreement.
(e) The entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company or the Guarantor
in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other similar
official for the Company or the Guarantor or for any substantial part of
either of their property, or ordering the liquidation of either of their
affairs and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days.
(f) The commencement by the Company or the Guarantor of a voluntary
case under the federal bankruptcy laws, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency or other
similar law, or the consent of either to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Company or the Guarantor or
for any substantial part of either of their property, or the making by
the Company or the Guarantor of any assignment for the benefit of
creditors, or the failure of the Company or the Guarantor generally to
pay its debts as such debts become due.
(g) The occurrence of an Event of Default as defined in the
Guaranty Agreement.
(h) The occurrence of an Event of Default under the Indenture.
Whenever any event of default shall have happened and is continuing, the
Issuer, or the Trustee as provided in the Indenture, may take any one or more
of the following remedial steps:
(a) By written notice to the Company, the Trustee, as provided in
the Indenture, may declare an amount equal to the principal and accrued
interest on the Bonds then outstanding to be immediately due and payable
under the Financing Agreement, whereupon the same shall become
immediately due and payable.
(b) The Trustee may take any action permitted under the Indenture
with respect to an Event of Default thereunder.
(c) The Trustee may exercise any remedy provided by the Guaranty
Agreement.
-14-
(d) The Issuer or the Trustee as provided in the Indenture may take
whatever action at law or in equity which may appear necessary or
desirable to collect the amounts payable by the Company under the
Financing Agreement, then due and thereafter to become due, or to enforce
performance and observance of any obligation, agreement or covenant of
the Company under the Financing Agreement.
Any amounts collected shall be paid into the Bond Fund and applied in
accordance with the provisions of the Indenture.
No remedy conferred upon or reserved to the Issuer or the Trustee is
intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every
other remedy given under the Financing Agreement or the Guaranty Agreement or
now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient.
Prepayment of the Loan. The Company shall have the option exercisable at
any time to prepay all or any portion of the Loan by depositing with the
Trustee moneys, or Federal Securities to the extent permitted by the Indenture
the principal and interest on which when due will be, equal to (giving effect
to the credit, if any, provided below) an amount sufficient to pay the
principal of (in integral multiples of $5,000) , and interest on all or any
portion of the Bonds then outstanding under the Indenture. The exercise of
this option shall not be cause for redemption of Bonds unless such redemption
is permitted at that time under the Indenture and the Company satisfies any
conditions to such redemption. In the event the Company prepays all of the
Loan pursuant to this paragraph, the prepayment price shall be a sum
sufficient (giving effect to the credit, i£ any, provided below) to redeem
all of the Bonds outstanding under the Indenture at the applicable redemption
price, or to pay the Bonds outstanding under the Indenture and the interest
thereon as same shall become due by their terms, and to pay all reasonable and
necessary fees and expenses of the Trustee and all Administration Expenses
accrued and to accrue through final payment of the Bonds and all other
liabilities of the Company accrued and to accrue under the Financing Agreement
through final payments of the Bonds.
The Company shall be obligated to prepay all of the Loan if the Bonds are
required to be redeemed as described in the second paragraph under "THE
BONDS--Redemption of Bonds. " In the case of prepayment of the Loan pursuant
to this paragraph, the prepayment price shall be a sum sufficient (giving
effect to the credit, if any, provided below) to redeem all Bonds then
outstanding under the Indenture at the redemption price set forth in the
Indenture, and to pay all reasonable and necessary fees and expenses of the
Trustee and all Administration Expenses accrued and to accrue through final
payment of the Bonds and all other liabilities of the Company accrued and to
accrue under the Financing Agreement through final payment of the Bonds.
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In the event of prepayment by the Company of the Loan in whole, the
amounts then contained in the Construction Fund shall be credited against the
Company's prepayment obligations.
By virtue of the assignment of the rights of the Issuer under the
Financing Agreement to the Trustee, the Company agrees to and shall pay any
amount required to be paid by it directly to the Trustee (other than amounts
to be paid to the Issuer for its own account) . The Trustee shall use moneys
so paid to it by the Company (other than amounts paid to the Trustee for its
own account) to pay the principal of and interest on the Bonds on regularly
scheduled payment dates or to redeem Bonds on the date set for redemption
thereof.
Amendments. The Financing Agreement may not be effectively amended,
changed, modified, altered or terminated without the written consent of the
Trustee, given in accordance with the Indenture.
THE GUARANTY AGREEMENT**
The following is a summary of certain provisions of the Guaranty
Agreement.
The Guarantor unconditionally guarantees to the Trustee for the benefit
of the holders of the Bonds the full and prompt payment to the Trustee of the
principal of and interest on each Bond when and as the same shall become due,
whether at the stated maturity of the Bonds or otherwise, all according to the
terms of the Indenture and the Bonds. The Guarantor further unconditionally
agrees to pay all reasonable expenses and charges, legal or otherwise
(including court costs and attorneys' fees), paid or incurred by the Trustee
in realizing upon any of the payments guaranteed or in enforcing the Guaranty
Agreement.
The Guaranty Agreement shall be a continuing, absolute and unconditional
guaranty according to its terms and shall remain in full force and effect
until the principal of and interest on the Bonds shall have been paid (or
provision for such payment made as provided in the Indenture) , irrespective of
the genuineness, validity, regularity, or enforceability of the Financing
Agreement or the Indenture or any assignment or termination of either, or the
bankruptcy, insolvency, reorganization or dissolution of the Issuer or the
Company or the assignment for the benefit of creditors of any assets by the
Issuer or the Company. The Guarantor further agrees that, if any payment or
any part thereof made by the Company or any other person and applied to the
Bonds is at any time annulled, avoided, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be refunded
** All capitalized terms used herein, not otherwise defined in this Official
Statement or under this Section, have the meanings as specified in the
Guaranty Agreement.
-16-
or repaid under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the
Guarantor's obligations under the Guaranty Agreement shall be and remain in
full force and effect, as fully as if such payment had never been made, or be
reinstated, as the case may be.
The Guaranty Agreement and the liability thereunder shall in no way be
affected or impaired by any compromise, settlement, release, renewal,
extension, indulgence, change in or modification of any of the obligations and
liabilities of the Company under the Financing Agreement, or by any delivery,
repossession, surrender or destruction of the Project, in whole or in part, or
by any failure, neglect or omission on the part of the Trustee to realize upon
any obligations or liabilities of the Company, or to give notice to the
Guarantor of the occurrence of any default under the Financing Agreement or
the Indenture; provided, however, that the Trustee, to the extent it has
knowledge thereof, shall give the Guarantor prompt written notice of the
occurrence of any default under the Financing Agreement or the Indenture
specifying such default. Without limiting the generality of the foregoing, if
the Company fails to make a Loan Payment when due pursuant to the Financing
Agreement, the Trustee shall give to the Guarantor written notice of such
failure by facsimile transmission on the Business Day immediately succeeding
such failure by the Company.
The obligations, covenants, agreements and duties of the Guarantor under
the Guaranty Agreement shall not be affected or impaired by reason of the
happening from time to time of any of the following with respect to the
Financing Agreement, the Indenture or the Guaranty Agreement, although without
notice to or consent of the Guarantor: (i) any assignment or mortgaging or the
purported assignment or mortgaging of all or any part of the interest of the
Company in the Financing Agreement or the Project; (ii) other than as directly
affected thereby, the waiver by the Issuer or the Trustee of the performance
or observance by the Company or by the Guarantor of any of the agreements,
covenants, terms or conditions contained in the Financing Agreement or the
Guaranty Agreement; (iii) the extension of the time for payment by the Company
or the Guarantor of sums or any part thereof owing or payable under the
Indenture, the Financing Agreement or the Guaranty Agreement or of the time
for performance by the Company or the Guarantor of any other obligations under
or arising out of the Indenture, the Financing Agreement or the Guaranty
Agreement or the extension or the renewal thereof; (iv) other than as directly
affected thereby, the modification or amendment (whether material or
otherwise) of any duty, agreement, or obligation set forth in the Indenture,
the Financing Agreement or the Guaranty Agreement; (v) the taking or the
omission of any of the actions referred to in the Indenture, the Financing
Agreement or the Guaranty Agreement; (vi) any failure, omission, delay or lack
on the part of the Issuer or the Trustee to enforce, assert or exercise any
right, power or remedy conferred on the Issuer or the Trustee in the
Indenture, the Financing Agreement or the Guaranty Agreement, or any action on
the part of the Issuer or the Trustee granting indulgence or extension in any
form; (vii) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, arrangement,
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composition or readjustment of, or other similar proceedings with respect to,
the Company; (viii) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term or condition
contained in the Indenture or the Financing Agreement by operation of law;
(ix) the release, substitution or replacement in accordance with the terms of
the Indenture or the Financing Agreement of any property subject thereto; (x)
the receipt and acceptance by the Trustee of notes, checks, or other
instruments for the payment of money made by the Company and extensions and
renewals thereof; or (xi) any other cause, whether similar or dissimilar to
the foregoing except for and to the extent of performance by and on behalf of
the Company of its obligations under the Indenture or the Financing Agreement.
The Guarantor agrees that, as long as any of the obligations of the
Company under the Agreement have not been satisfied or discharged, the
Guarantor will maintain its corporate existence, will not sell or otherwise
transfer all or substantially all of its assets to another entity and
thereafter dissolve or consolidate with or merge into another corporation or
permit one or more other corporations to consolidate with or merge into it;
provided, however, that (i) the Company or any other wholly owned subsidiary
of the Guarantor may consolidate with or merge into the Guarantor and (ii) the
Guarantor may sell or otherwise transfer to another entity all or
substantially all of its assets and thereafter dissolve or consolidate with or
merge into another corporation or corporations, or permit one or more other
corporations to consolidate with or merge into it if the surviving, resulting
or transferee corporation 'shall be a corporation incorporated and existing
under the laws of one of the states of the United States, shall have a
consolidated net worth after giving effect to such acquisition, consolidation
or merger at least equal to ninety percent of that of the Guarantor
immediately prior to such acquisition, consolidation or merger and such
surviving, resulting or transferee corporation shall assume in writing all of
the obligations of the Guarantor under this Guaranty Agreement. Consolidated
net worth shall be determined in accordance with generally accepted accounting
principles consistently applied.
The following shall be considered "Events of Default" under the Guaranty
Agreement, and the term "Event of Default" shall mean, whenever used in the
Guaranty Agreement, any one or more of the following events: (i) failure by
the Guarantor to make any payment required by the Guaranty Agreement within
one Business Day of receipt of written notice from the Trustee of any failure
by the Company to make the payments required with respect to the Bonds; (ii)
the Guarantor's failure to observe and perform any of its other covenants,
conditions or agreements contained in the Guaranty Agreement for a period of
thirty days after written notice (unless the Trustee shall agree in writing to
an extension of such time prior to its expiration) specifying such failure and
requesting that it be remedied, given by the Trustee to the Guarantor; (iii)
any representation or warranty by the Guarantor contained in the Guaranty
Agreement is false or misleading in any material respect at the time made;
(iv) the dissolution or liquidation of the Guarantor or the failure by the
Guarantor promptly to lift any execution, garnishment or attachment of such
consequence as will impair the ability of the Guarantor to make any payments
under the Guaranty Agreement; provided that the term "dissolution or
liquidation of the Guarantor," as used in this clause, shall not be construed
-18-
to include the cessation of the existence of the Guarantor resulting from the
dissolution of the Guarantor following a transfer of all or substantially all
of its assets under the conditions permitting such actions as set forth in the
Guaranty Agreement; (v) the entry of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Guarantor in an
involuntary case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar official for the Guarantor
or for any substantial part of its property, or ordering the liquidation of
its affairs and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or (vi) the commencement by the
Guarantor of a voluntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or the consent of the Guarantor to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Guarantor or
for any substantial part of its property, or the making by the Guarantor of
any assignment for the benefit of creditors, or the failure of the Guarantor
generally to pay its debts as such debts become due.
THE INDENTURE***
The following is a summary of the Indenture.
The Bonds and all payments by the Issuer under the Indenture are not
general obligations of the Issuer, and shall never constitute its
indebtedness, but are the special, limited obligations of the Issuer payable
solely from revenues and receipts derived from the Financing Agreement as
authorized by the Act and provided in the Indenture, from the Guaranty
Agreement and from the other security pledged.
The proceeds of the Bonds (exclusive of any accrued interest paid by the
initial purchaser of the Bonds) have been loaned to the Company under the
Financing Agreement, and the Loan Payments provided in the Financing Agreement
are to be remitted directly to the Trustee for the account of the Issuer and
deposited in the Bond Fund. Said payments are sufficient in amount to insure,
and are hereby pledged to secure, the prompt payment of the principal of and
interest on the Bonds.
The Issuer will establish and create the Bond Fund, the Construction Fund
and the Rebate Fund, which shall be special trust funds held by the Trustee.
*** All capitalized terms used herein, not otherwise defined in this Official
Statement or under this Section, have the meanings as specified in the
Indenture.
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Payments into and Uses of Moneys in the Bond Fund
There shall be deposited into the Bond Fund from the proceeds of the
Bonds all accrued interest received from the sale of the Bonds to the initial
purchaser thereof. In addition, there shall also be deposited into the Bond
Fund, as and when received, (i) all Loan Payments required by the Financing
Agreement to be deposited in the Bond Fund, (ii) all moneys transferred to the
Bond Fund from the Construction Fund pursuant to the Indenture, (iii) all
moneys received by the Trustee pursuant to the Guaranty Agreement, (iv) all
other moneys required or permitted to be deposited therein pursuant to the
Financing Agreement and (v) all other moneys received by the Trustee when
accompanied by directions that such moneys are to be paid into the Bond Fund.
There shall also be retained in the Bond Fund all interest and other income
received on investments of Bond Fund moneys to the extent provided in the
Indenture.
The amounts deposited in the Bond Fund pursuant to the first sentence of
the immediately succeeding paragraph shall be used to make a portion of the
first interest payment on the Bonds. Except as provided in the Indenture,
moneys in the Bond Fund shall be used solely for the payment of the principal
of and interest on the Bonds. Whenever the amount in the Bond Fund (exclusive
of amounts to be transferred to the Rebate Fund) is sufficient to redeem all
the Bonds outstanding and to pay interest to accrue thereon prior to such
redemption and the Bonds are subject to redemption pursuant to the Indenture,
the Issuer, subject to the requirements of the Financing Agreement, covenants
to take and cause to be taken the steps necessary to redeem all of the Bonds
on the redemption date for which the required redemption notice has been given.
Custody of the Bond Fund
The Bond Fund shall be in the custody of the Trustee but in the name of
the Issuer and the Issuer authorizes and directs the Trustee to withdraw
sufficient funds from the Bond Fund to pay the principal of and interest on
the Bonds as the same become due and payable, which authorization and
direction the Trustee hereby accepts.
Construction Fund
The balance of the proceeds of the sale of the Bonds remaining after the
deposit of the accrued interest shall be deposited in the Construction Fund.
There shall be retained in the Construction Fund all interest and other income
received on investments of Construction Fund moneys except as provided in the
Indenture. Such proceeds shall be expended in accordance with the provisions
of the Financing Agreement.
The Trustee shall keep and maintain adequate records pertaining to the
Construction Fund and all payments therefrom, which shall be open to
inspection by the Issuer and the Company or their duly authorized agents
during normal business hours of the Trustee.
-20-
Completion of the Project
The completion of the Project and payment of all the Cost of Construction
shall be evidenced by the filing with the Trustee of the certificate required
by the Financing Agreement. As soon as practicable and in any event not more
than 60 days from the date of such certificate, any balance remaining in the
Construction Fund (other than the amounts retained by the Trustee pursuant to
such certificate for payment of any Cost of Construction not then due and
payable) shall be deposited in the Rebate Fund if necessary to enable the
Issuer to comply with the Indenture or shall be applied by the Trustee in
accordance with the Financing Agreement.
Rebate Fund
There shall be deposited into the Rebate Fund amounts paid by the Company
pursuant to the Financing Agreement as required to comply with the Code. In
addition, notwithstanding any other provision of the Indenture, upon the
written direction of the Company, any investment income or other gain on
moneys in either of the Funds may be transferred to the Rebate Fund to enable
the Issuer to satisfy the requirements of the Code. Moneys in the Rebate Fund
shall be paid to the United States in the amounts and at the times required by
the Code. Upon payment of all amounts due to the United States pursuant to
the Code, any moneys remaining in the Rebate Fund shall be paid by the Trustee
to the Company.
Nonpresentment of Bonds
In the event any Bond shall not be presented for payment when the
principal thereof becomes due, either at maturity, on a redemption date, or
otherwise, if funds sufficient to pay such Bond shall have been deposited with
the Trustee for the benefit of the holder thereof, all liability of the Issuer
to the holder thereof for the payment of such Bond shall forthwith cease,
determine and be completely discharged, and thereupon it shall be the duty of
the Trustee to hold such funds, without liability for interest thereon, for
the benefit of the holder of such Bond, who shall thereafter be restricted
exclusively to such fund or funds for any claim of whatever nature on his or
her part under the Indenture or on, or with respect to, said Bond. If any
Bond shall not be represented for payment six months prior to the time when
the moneys held for payment of such Bond would escheat to the State of
Colorado, the Trustee shall return to the Company the funds theretofore held
by it for payment of such Bond and such Bond shall, subject to the defense of
any applicable statute of limitation, thereafter be an unsecured obligation of
the Company.
Moneys to be Held in Trust
All moneys required to be deposited with or paid to the Trustee under any
provision of the Indenture shall be held by the Trustee in trust for the
purposes specified in the Indenture, and, except for moneys held by the
Trustee pursuant to the immediately preceding caption, moneys deposited with
or paid to the Trustee for the redemption of Bonds for which the notice of
redemption has been duly given and moneys contained in the Rebate Fund, shall,
-21-
while held by the Trustee, constitute part of the Trust Estate and be subject
to the lien of the Indenture.
Investments
All moneys held as a part of the Construction Fund or the Bond Fund
(except as provided below) shall be invested or reinvested by the Trustee, at
the written request and direction of the Company Representative or upon the
oral direction of the Company Representative, promptly confirmed in writing
(upon which the Trustee is entitled to rely) , to the extent then permitted by
law, in (i) bonds or other obligations of the United States of America, (ii)
bonds or other obligations, the payment of the principal and interest of which
is unconditionally guaranteed by the United States of America, (iii)
obligations issued or guaranteed as to principal and interest by any agency or
person controlled or supervised by and acting as an instrumentality of the
United States of America pursuant to authority granted by the Congress of the
United States of America, (iv) obligations issued or guaranteed by any state
of the United States of America or any political subdivision of any such state
which have been rated A or its equivalent or higher by a nationally recognized
rating agency, (v) bankers' acceptances drawn on and accepted by commercial
banks and certificates of deposit issued by Federal Reserve System commercial
banks, provided that no such moneys shall be invested in bankers' acceptances
or in certificates of deposit of Federal Reserve System commercial banks
unless such moneys are fully insured by the Federal Deposit Insurance
Corporation (or any successor thereto) or unless the amount in excess of such
insurance is fully collateralized by obligations described in clause (i) or
(ii) above and (vi) money market deposit accounts issued or offered by any
domestic office of a financial institution in the United States with a
combined capital and surplus and undivided profits of not less than
$25,000,000. All moneys held as part of the Bond Fund which are paid to the
Trustee pursuant to the Guaranty Agreement and as part of the Rebate Fund
shall be invested or reinvested by the Trustee only in obligations of the type
described in clauses (i) and (ii) above.
Any such investments shall be held by or under the control of the Trustee
and shall be deemed at all times a part of the Fund or the Rebate Fund, as the
case may be, from which the investment was made. Any loss resulting from such
investments shall be charged to such Fund or the Rebate Fund, as the case may
be. Any interest or other gain from any Fund from any investment or
reinvestment pursuant to the Indenture shall be allocated and transferred as
follows (subject to the right of the Company to transfer investment income or
other gain to the Rebate Fund) :
(a) Any interest or other gain realized as a result of any
investments or reinvestments of moneys in the Construction Fund shall be
credited to the Construction Fund.
(b) Any interest or other gain realized as a result of any
investments or reinvestments of moneys in the Bond Fund shall, prior to
the Completion Date, be credited to the Construction Fund and, after the
Completion Date, shall be credited to the Bond Fund.
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(c) Any interest or other gain realized as a result of any
investments or reinvestments of moneys in the Rebate Fund shall be
credited to the Rebate Fund.
Tax Covenant
The Issuer covenants for the benefit of the holders of the Bonds, in
reliance upon the covenants of the Company contained in the Financing
Agreement, that it will not take any action or omit to take any action with
respect to the Bonds, the proceeds thereof, any other funds of the Issuer or
any facilities financed with the proceeds of the Bonds if such action or
omission would cause the interest on the Bonds, except for interest during any
period during which any Bond is held by a "substantial user" of the Project or
a "related person" as such terms are used in the Code, to lose its exclusion
from gross income for federal income tax purposes under the Code. The
foregoing covenant shall remain in full force and effect notwithstanding the
payment in full or defeasance of the Bonds until the date on which all
obligations of the Issuer and the Company in fulfilling the above covenant
under the Code have been met.
Discharge of Indenture
If, when the Bonds shall become due and payable in accordance with their
terms or otherwise as provided in the Indenture and the whole amount of the
principal of and interest due and payable upon all of the Bonds shall be paid
or provision shall have been made for the payment of the same, together with
all other sums payable under the Indenture and under the Financing Agreement,
then the right, title and interest of the Trustee in and to the Trust Estate
and all covenants, agreements, and other obligations of the Issuer to the
Bondholders shall thereupon cease, terminate and become void and be discharged
and satisfied. In such event, upon the request of the Issuer, the Trustee
shall reassign and transfer to the Issuer all property assigned or pledged to
the Trustee by the Issuer then held by the Trustee pursuant to the Indenture
and shall execute such documents as may be reasonably required by the Issuer
and shall turn over to the Company any surplus in any Fund created under the
Indenture.
Any outstanding Bond shall, prior to the maturity or redemption date
thereof, be deemed to have been paid within the meaning and with the effect
expressed above if (i) in case said Bond is to be redeemed on any date prior
to its maturity, the Company shall have given to the Trustee in form
satisfactory to the Trustee irrevocable instructions to give notice as
specified in the Indenture of redemption of such Bond on said redemption date,
(ii) there shall have been deposited with the Trustee at least three Business
Days prior to the redemption or maturity date of such Bond either moneys in an
amount which shall be sufficient, or Federal Securities which shall not
contain provisions permitting the redemption thereof at the option of the
Issuer, the principal of and the interest on which when due, and without any
reinvestment thereof, will provide moneys which, together with the moneys, if
any, deposited with or held by the Trustee at the same time and available
therefor, shall be sufficient to pay when due the principal of and interest
due and to become due on said Bond on and prior to the redemption date or
-23-
maturity date thereof, as the case may be, and (iii) in the event said Bond is
not by its terms subject to redemption within the next 45 days, the Company
shall have given the Trustee in form satisfactory to it irrevocable
instructions to give, as soon as practicable in• the same manner as the notice
of redemption is given, a notice to the holder of such Bond that the deposit
required by (ii) above has been made with the Trustee and that said Bond is
deemed to have been paid as specified in the Indenture and stating such
maturity or redemption date upon which moneys are to be available for the
payment of the principal of and interest on said Bond. Neither the Federal
Securities nor moneys deposited with the Trustee or principal or interest
payments on any such Federal Securities shall be withdrawn or used for any
purpose other than, and shall be held in trust for, the payment of the
principal of and interest on the Bonds; provided any cash received from such
principal or interest payments on such Federal Securities deposited with the
Trustee, if not then needed for such purpose, shall, to the extent
practicable, be reinvested in Federal Securities of the type described in
clause (ii) of this paragraph maturing at the times and in amounts sufficient
to pay when due the principal of and interest to become due on the Bonds on or
prior to such redemption date or maturity date thereof, as the case may be.
At such time as a Bond shall be deemed paid as aforesaid, such Bond shall no
longer be secured by or entitled to the benefits of the Indenture and the
Financing Agreement, except for the purpose of any payment from such moneys or
Federal Securities deposited with the Trustee.
Defaults and Remedies
If any of the following events occur it is hereby defined as and shall be
deemed an "Event of Default":
(a) Default in the payment of the principal of any Bond when the
same shall become due and payable, whether at the stated maturity
thereof, a redemption date or upon acceleration.
(b) Default in the payment of any installment of interest on any
Bond when the same shall become due and payable.
(c) The occurrence of an "event of default" under the Financing
Agreement.
Upon the occurrence of an Event of Default, the Trustee shall have the
following rights and remedies:
(a) The Trustee may, and upon the written request of the holders of
not less than 25% in aggregate principal amount of Bonds outstanding
shall, by notice in writing given to the Issuer and the Company, declare
the principal amount of all Bonds then outstanding and the interest
accrued thereon to be immediately due and payable. Upon any declaration
of acceleration, the Issuer and the Trustee shall immediately declare all
Loan Payments under the Financing Agreement to be immediately due and
payable as provided in the Financing Agreement.
-24- .
(b) Upon the filing of a bill in equity or other commencement of
judicial proceedings to enforce the rights of the Trustee and of the
Bondholders, the Trustee shall be entitled as a matter of right to the
appointment of a receiver or receivers of the Trust Estate, and of the
revenues, income, product and profits thereof, pending such proceedings,
but, notwithstanding the appointment of any receiver, trustee or other
custodian, the Trustee shall be entitled to the possession and control of
any cash, securities or other instruments at the time held by, or payable
or deliverable under the provisions of the Indenture to, the Trustee.
(c) The Trustee may, and upon the written request of the holders of
not less than 25% in aggregate principal amount of Bonds then outstanding
shall, proceed to protect and enforce its rights and the rights of the
Bondholders under the Act, the Bonds, the Financing Agreement, the
Guaranty Agreement and the Indenture and any provision of law by such
suit, action or special proceedings as the Trustee, being advised by
counsel, shall deem appropriate. Any judgment against the Issuer shall
be enforceable only against the Trust Estate and no deficiency judgment
against the general credit of the Issuer shall be authorized. No
recovery of any judgment by the Trustee shall in any manner or to any
extent affect the lien of the Indenture or any rights, powers or remedies
of the Trustee, or any lien, rights, powers or remedies of the holders of
the Bonds, but such liens, rights, powers and remedies of the Trustee and
the Bondholders shall continue unimpaired as before.
(d) The Trustee may exercise any of its rights and remedies under
the Guaranty Agreement.
No right or remedy is intended to be exclusive of any other right or
remedy, but each and every such right or remedy shall be cumulative and in
addition to any other remedy given or now or hereafter existing at law or in
equity or by statute.
If any Event of Default shall have occurred and if requested by the
holders of 25% in aggregate principal amount of Bonds then outstanding and
indemnified as provided in the Indenture, the Trustee shall be obligated to
exercise such one or more of the rights and powers conferred by the Indenture
as the Trustee, being advised by counsel, shall deem most expedient in the
interests of the Bondholders.
Majority of Bondholders
May Control Proceedings
Anything in the Indenture to the contrary notwithstanding, the holders of
a majority in aggregate principal amount of the Bonds then outstanding shall
have the right, at any time, to the extent permitted by law, by an instrument
or instruments in writing executed and delivered to the Trustee, to direct the
time, method and place of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of the Indenture, or for the
appointment of a receiver, and any other proceedings.
-25-
Rights and Remedies of Bondholders
No holder of any Bond shall have any right to institute any suit, action
or proceeding in equity or at law for the enforcement of the Indenture or for
the execution of any trust thereof or for the appointment of a receiver or any
other remedy thereunder, unless a default has occurred of which the Trustee
has been notified as provided in the Indenture, or of which it is deemed to
have notice nor unless such default shall have become an Event of Default and
the holders of not less than 25e in aggregate principal amount of Bonds then
outstanding shall have made written request to the Trustee and shall have
offered reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or proceedings in its
own name, nor unless they have also offered to the Trustee indemnity as
provided in the Indenture nor unless the Trustee shall thereafter fail or
refuse to exercise the powers granted, or to institute such action, suit or
proceeding in its own name; and such notification, request and offer of
indemnity are declared in every case at the option of the Trustee to be
conditions precedent to the execution of the powers and trusts of the
Indenture, and to any action or cause of action for the enforcement of the
Indenture, or for the appointment of a receiver or for any other remedy under
the Indenture; it being understood and intended that no one or more holders of
the Bonds shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien of the Indenture by his, her, its or their action or to
enforce any right under the Indenture except in the manner therein provided
and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner provided in the Indenture and for the equal benefit
of the holders of all Bonds then outstanding.
Application of Moneys
All moneys received by the Trustee pursuant to any right given or action
taken shall, after payment of the costs and expenses of the proceedings
resulting in the collection of such moneys and the fees, expenses, liabilities
and advances incurred or made by the Trustee, be deposited in the Bond Fund
and all moneys so deposited in the Bond Fund and all moneys held or deposited
in the Bond Fund during the continuance of an Event of Default and available
for payment of the Bonds shall be applied as follows:
(a) Unless the principal of all the Bonds shall have become or
shall have been declared due and payable, all such moneys shall be
applied:
First--To the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, in the order of the
maturity of the installments of such interest and, if the amount
available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the amounts
due on such installment, to the persons entitled thereto, without
any discrimination or privilege; and
-26-
Second--To the payment to the persons entitled thereto of the
unpaid principal of any of the Bonds which shall have become due
(other than Bonds called for redemption for the payment of which
moneys are held pursuant to the provisions of the Indenture) (with
interest on such Bonds from the date upon which they became due, to
the maximum extent permitted by law, at a rate which shall be 1%
above the rate of interest then charged by the Trustee on ninety-day
unsecured commercial loans to its prime commercial borrowers or at
the rate of interest borne by the outstanding Bonds, whichever is
higher), and, if the amount available shall not be sufficient to pay
the Bonds in full, together with such interest, then to the payment
ratably, according to the amount of principal due, to the persons
entitled thereto, without any discrimination or privilege.
(b) If the principal of all the Bonds shall have become due or
shall have been declared due and payable, all such moneys shall be
applied to the payment of the principal and interest then due and unpaid
upon all of the Bonds (with interest on overdue installments of
principal, to the maximum extent permitted by law, at a rate which shall
be 1% above the rate of interest then charged by the Trustee on
ninety-day unsecured commercial loans to its prime commercial borrowers
or at the rate of interest borne by the outstanding Bonds, whichever is
higher) , without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other
installment of interest, or of any Bond over any other Bond, ratably,
according to the amounts due respectively for principal and interest, to
the persons entitled thereto, without any discrimination or privilege.
(c) If the principal of all the Bonds shall have been declared due
and payable, and if such declaration shall thereafter have been rescinded
and annulled, then, subject to the provisions of paragraph (b) above in
the event that the principal of all the Bonds shall later become due or
be declared due and payable, the moneys shall be applied in accordance
with the provisions of paragraph (a) above.
Whenever all of the Bonds and interest thereon have been paid as
described above and all expenses and fees of the Trustee and all
Administration Expenses and all other liabilities of the Company under the
Financing Agreement have been paid, any balance remaining in the Funds shall
be applied as provided in the Indenture.
Trustee to File Proofs
of Claim in Receivership
In the case of any receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings affecting
the Company, the Trustee shall, to the extent permitted by law, be entitled to
file such proofs of claims and other documents as may be necessary or
advisable in order to have claims of the Trustee and of the Bondholders
allowed in such proceedings for the entire amount due and payable by the
Issuer under the Indenture, or by the Company, as the case may be, at the date
-27-
of the institution of such proceedings and for any additional amounts which
may become due and payable by it after such date, without prejudice, however,
to the right of any Bondholder to file a claim in his own behalf.
Waivers of Events of Default
The Trustee may in its discretion waive any Event of Default under the
Indenture and its consequences, and shall do so upon the written request of
the holders of two-thirds in aggregate principal amount of all the Bonds then
outstanding; provided, however, that there shall not be waived without the
consent of the holders of 100% of the Bonds then outstanding as to which the
Event of Default exists (i) any Event of Default in the payment of the
principal of any outstanding Bonds at the date of maturity specified therein
or at any redemption date or (ii) any default in the payment when due of the
interest on any such Bonds, unless prior to such waiver, all arrears of
interest or all arrears of payments of principal then due, as the case may be
(with interest on such principal, to the maximum extent permitted by law, at a
rate which shall be 1% above the rate of interest then charged by the Trustee
on ninety-day unsecured commercial loans to its prime commercial borrowers or
at the rate of interest borne by the outstanding Bonds, whichever is higher) ,
and all expenses of the Trustee in connection with such default shall have
been paid or provided for. In case of any such waiver, or in case any
proceedings taken by the Trustee on account of any such default shall have
been discontinued or abandoned or determined adversely to the Trustee, then
and in every such case the Issuer, the Trustee and the Bondholders shall be
restored to their former positions and rights under the Indenture
respectively, but no such waiver shall extend to any subsequent or other
default, or impair any right consequent thereon.
Supplemental Indentures Not
Requiring Consent of Bondholders
The Issuer and the Trustee may, without the consent of, or notice to, the
Bondholders, enter into such indentures or agreements supplemental to the
Indenture for any one or more or all of the following purposes:
(a) To add to the covenants and agreements of the Issuer contained
in the Indenture other covenants and agreements to be thereafter observed
by the Issuer;
(b) To cure any ambiguity, or to cure, correct or supplement any
defect or omission or inconsistent provision contained in the Indenture,
or to make any provisions with respect to matters arising under the
Indenture or for any other purpose if such provisions are necessary or
desirable and do not adversely affect the interests of the holders of the
Bonds;
(c) To subject to the Indenture additional revenues, properties or
collateral; or
(d) To qualify the Indenture under the Trust Indenture Act of 1939.
-28-
Supplemental Indentures
Requiring Consent of Bondholders
Exclusive of supplemental indentures referred to above, the holders of
not less than two—thirds in aggregate principal amount of the Bonds then
outstanding shall have the right, from time to time, to consent to and approve
the execution by the Issuer and the Trustee of such indenture or indentures
supplemental to the Indenture as shall be deemed necessary or desirable by the
Issuer for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in the
Indenture; provided, however, that without the consent of the holders of all
the Bonds at the time outstanding affected thereby nothing in the Indenture
contained shall permit or be construed as permitting:
(a) A change in the terms of redemption or maturity of the
principal amount of or the interest on any outstanding Bond, or a
reduction in the principal amount payable upon any redemption of any
outstanding Bond or the rate of interest thereon;
(b) The deprivation of the holder of any Bond then outstanding of
the lien created by the Indenture (other than as originally permitted by
the Indenture) ;
(c) A privilege or priority of any Bond or Bonds over any other
Bond or Bonds; or
(d) A reduction in the aggregate principal amount of the Bonds
required for consent to such supplemental indenture.
Consent of Company
Anything in the Indenture to the contrary notwithstanding, a supplemental
indenture which affects the rights of the Company shall not become effective
unless and until the Company shall have consented to the execution and
delivery of such supplemental indenture.
Amendments to Financing Agreement Not
Requiring Consent of Bondholders
The Issuer and the Trustee may without the consent of or notice to the
Bondholders consent to any amendment, change or modification of the Financing
Agreement as may be required (i) by the provisions of the Financing Agreement
and the Indenture, (ii) for the purpose of curing any ambiguity or formal
defect or omission in the Financing Agreement or (iii) in connection with any
other change therein which, in the judgment of the Trustee, is not to the
prejudice of the Trustee or the holders of the Bonds.
_Zg_
Amendments to Financing Agreement
Requiring Consent of Bondholders
Except for the amendments, changes or modifications permitted above,
neither the Issuer nor the Trustee shall consent to any other amendment,
change or modification of the Financing Agreement without the giving of notice
and the written approval or consent of the holders of not less than two—thirds
in aggregate principal amount of the Bonds at the time outstanding given and
procured as provided in the Indenture.
Opinion of Counsel
The Trustee may receive an Opinion of Counsel as conclusive evidence that
any supplemental indenture or amendment to the Financing Agreement complies
with the provisions of the Indenture.
UNDERWRITING
Subject to the terms and conditions set forth in the Bond Purchase
Agreement, the Issuer has agreed to sell the Bonds to the Underwriter at an
aggregate purchase price of $4,059,000. The Underwriter is committed to take
and pay for all Bonds if any are taken.
TAX EXEMPTION
In the opinion of Sherman & Howard, Bond Counsel, assuming continuous
compliance with certain covenants described below, interest on the Bonds,
except for interest on any Bond for any period during which it is held by a
"substantial user" of the facilities financed with the Bonds or a "related
person" as such terms are used in Section 147(a) of the Internal Revenue Code
of 1986, as amended (the "Code") , is not included in gross income under
present federal income tax laws pursuant to Section 103 of the Code; however,
interest on the Bonds is an item of tax preference for purposes of calculating
alternative minimum taxable income as defined in Section 55(b)(2) of the Code
under present federal income tax laws. Interest on the Bonds is not included
in Colorado income or Colorado alternative .minimum taxable income under
present Colorado income tax laws. The Code imposes several requirements which
must be met with respect to the Bonds in order for interest thereon to be
excluded from gross income to the extent described above. Certain of these
requirements must be met on a continuous basis throughout the term of the
Bonds. These requirements include: (a) limitations as to the use of proceeds
of the Bonds; (b) limitations on the extent to which proceeds of the Bonds may
be invested in higher yielding investments; and (c) a provision, subject to
certain limited exceptions, that requires all investment earnings on the
proceeds of the Bonds above the yield on the Bonds to be paid to the United
States Treasury. The Issuer will covenant and represent in the Financing
Agreement that it will take all steps to comply with the requirements of the
Code to the extent necessary to maintain the exclusion of interest on the
Bonds from gross income under present federal income tax laws. Bond Counsel's
opinion as to the exclusion of interest on the Bonds from gross income (to the
-30-
extent described above) is rendered in reliance on these covenants, and
assumes continuous compliance therewith. The failure or inability of the
Issuer to comply with these requirements could cause the interest on the Bonds
to be included in gross income.
Section 55 of the Code contains a 20 percent alternative minimum tax on
the alternative minimum taxable income df corporations and a 24 percent
alternative minimum tax on the alternative minimum taxable income of taxpayers
other than corporations. Alternative minimum taxable income is defined to
include "items of tax preference," and under Section 57 of the Code, interest
on the Bonds is an item of tax preference.
In addition, under Section 59A of the Code, a 0.12 percent "environmental
tax" is imposed on the excess of a corporation's modified alternative minimum
taxable income over $2,000,000. "Modified alternative minimum taxable income"
is defined as alternative minimum taxable income determined without regard to
the alternative tax net operating loss deduction and the deduction allowed for
this "environmental tax. " Interest on the Bonds is an item of tax preference
and consequently is included in a corporation's modified alternative minimum
taxable income in the same manner as described in the previous paragraph with
respect to alternative minimum taxable income. This environmental tax is
applied in addition to, and not as a substitution for, other taxes including
the alternative minimum tax discussed in the previous paragraph.
The Code contains numerous provisions which may affect an investor's
decision to purchase the Bonds. Owners of the Bonds should be aware that the
ownership of tax-exempt obligations by particular persons and entities,
including, without limitation, financial institutions, insurance companies,
recipients of Social Security or Railroad Retirement benefits, taxpayers who
may be deemed to have incurred or continued indebtedness to purchase or carry
tax-exempt obligations, foreign corporations doing business in the United
States and certain "subchapter S" corporations, may result in adverse federal
tax consequences. Bond Counsel's opinion relates only to the exclusion of
interest on the Bonds from gross federal income, Colorado taxable income and
Colorado alternative taxable income as described above and will state that no
opinion is expressed regarding other federal or Colorado tax consequences
arising from the receipt or accrual of interest on or ownership of the Bonds.
Owners of the Bonds should consult their own tax advisors as to the
applicability of these consequences.
The opinions expressed by Bond Counsel are based upon existing law as of
the delivery date of the Bonds. No opinion is expressed as of any subsequent
date nor is any opinion expressed with respect to any pending or proposed
legislation. Amendments to federal and Colorado tax laws may be pending now
or could be proposed in the future which, if enacted into law, could adversely
affect the value of the Bonds, the exclusion of interest on the Bonds from
gross income, alternative minimum taxable income, Colorado taxable income or
Colorado alternative minimum taxable income or any combination thereof from
the date of issuance of the Bonds or any other date, or which could result in
other adverse federal or Colorado tax consequences. Bond owners are advised
to consult with their own tax advisors with respect to such matters.
-31-
RATING
Moody's Investors Service, Inc. has given the Bonds the rating shown on
the cover page hereof. There is no assurance that the rating will continue
for any given period of time or that it will not be revised downward or
withdrawn entirely, if in the judgment of the rating agency circumstances so
warrant. Any such downward revision or withdrawal of such rating may have an
adverse effect on the market price of the Bonds.
APPROVAL OF LEGAL PROCEEDINGS
Legal matters incident to the authorization, issuance and sale by the
Issuer of the Bonds and with regard to the tax-exempt status thereof under
existing laws are subject to the approving opinion of Sherman 6 Howard,
Denver, Colorado, Bond Counsel. Copies of such opinion will be available at
the time of the delivery of the Bonds. Certain legal matters will be passed
upon for the Company by McGrath, North, Mullin 6 Kratz, Omaha, Nebraska, as
Counsel for the Company.
Bond Counsel has reviewed this Official Statement only to the extent of
the descriptions contained under the headings "THE BONDS," "THE FINANCING
AGREEMENT," "THE INDENTURE," "THE GUARANTY AGREEMENT" and "TAX EXEMPTION. " No
purchaser of the Bonds is authorized to rely on Sherman 6 Howard as being
responsible for this Official Statement except to such extent.
This Official Statement has been duly approved, executed and delivered by
the Company.
MONFORT, INC.
By /s/ Gregory A. Thiesen
Vice President - Accounting
Monfort, Inc.
-32-
APPENDIX A
CONAGRA, INC.
Fiscal 1991 Annual Report To Stockholders
and
Quarterly Report on Form 10-Q
For the Quarter Ended
August 25, 1991
A-1
•
[THIS PAGE INTENTIONALLY LEFT BLANK]
titAt2.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-0
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarter ended August 25, 1991 Commission File No. 1-7275
CONAGRA, INC.
(Exact name of registrant, as specified in charter)
( Delaware 47-0248710
(State of Incorporation) (I.R.S. Employer's Number)
One ConAgra Drive, Omaha, Nebraska 68102-5001
(Address of Principal Executive Offices) (Zip Code)
Registrant 's telephone number, including area code: 402-595-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
As of September 22, 1991, there were 150,189,328 common shares of
the registrant outstanding.
1
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THIS PAGE INTENTIONALLY LEFT BLANK
2
PART I - FINANCIAL INFORMATION
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
CONSOLIDATED
AUG. 25, MAY 26, AUG, 26 ,
ASSETS 1990
Current assets :
Cash and cash equivalents $ 123 .9 $ 721 . 9 $ 182 . 3
Receivables, lees allowance for
doubtful accounts o£ 546 .7, 542. 6
and 5498 1,768.2 1 , 283 .6 2 , 160 . 2
Margis n deposits and segregated
fun 189 .6 250 . 8 257 . 4 InHHedge4dycommodities 628.0 520.2 528 .7
Other 1,964 .7 1,607 .2 1, 928 . 3
Total inventory 2 , 592.7 2, 127 . 4 2, 457 . 0
Prepaid expenses 163 .6 148.4 144 . 0
Total current assets 4,838.8 4, 532 .1 5 , 200 .9
Other assets:
Investments in unconsolidated 181.0 176 .4 102.0
subsidiaries
Sundry investments, deposits g 5
an noncurrent receivables 125 .9 126.4 119 .4
Deferred income taxes
Total other assets 364 .1 353.9 392 .1
Property, lant and equi ent
at cost, less accumulate870.2
anarc3tlon of 59 . 2,220.8 2,215 . 4 2, 056 . 6
Onamosrtti7zed9 finance expense 13.0 13 .5 6 . 2
Brands, trademarks and goodwill, at
cost less accumulated amortization 2,787 .9 2,737 .5 2,645 .7
$18,223.8 $ 9,852.4 $10 , 301 . 5
The accompanying notes are an integral part of the consolidated
financial statements.
3
AUG�9151C F�99COMPAAUG, 26, AUG 2i
$ 77.3 $ 672.4 S 121. 4 S 46 .6 $ 49. 5 $ 60,9
1,583.4 1, 051.0 1,844 .7 184. 8 232.6 315 . 5
- - 189.6 258.8 257. 4
1,44839.1 1,4881.9g7 1,3381557:2 125.6 1255.55 111.1
2'148.1 2'137.3 2'148.8 115.5 111.1 113.3
4 ,275.9 3,862 .6 4,452.8 562.1 669.5 748.1
181. 0 176.4 99.1 - - 2.9
146 . 0 143.1 161.4 11.3 8.3 9.3
25.8 26 .1 119. 4 _ _
352.8 345.6 379 .9 11 .3 8.3 12.2
2,217 .1 2,211. 5 2,852. 5 3.7 3.9 4.1
13 .8 13 .5 6.2 _ _
2,776.5 2,725.5 2,631.3 11.4 12. 0 14.4
$ 9 ,635 .3 $ 9,158.7 $ 9,522.7 $ 588.5 $ 693.7 $ 778.8
4
CONAGRA, INC . AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
AUGG 2 COMAY NSSOLID�ATEAUG 26 ,
LIABILITIES AND STOCKHOLDERS ' EQUITY 1 915 , 1991 1990
Current liabilities :
Notes ayable $ 1,645. 6 $ 256 .9 $ 2, 169 . 4
Curren installment of long-term debt 415 . 4 553 . 7 67 . 9
Accounts payable an accrue liabilities 2, 041 .2 2, 433 . 9 1 , 808 . 2
Advances on sales 185 .7 581 . 3 244 .8
Payable to customers, clearing
associations, etc. 219 .1 274. 0 468 . 4
Dividends payable 27 . 0 2 2 19 . 3
l Income taxes 85.4 5 . 1 46 . 7
Total current liabilities 4 ,619. 4 4, 179 . 9 4 , 824 . 7
Senior long-term debt, excluding current
installments 1,754.3 1,886 .8 2,170 . 8
Other noncurrent liabilities 1,079.3 1, 066.4 1, 316 .9
Subordinated debt 430.0 430.0 30 . 0
Preferred shares subject to
mandatory redemption yp tthh 356.1 356 .1 356 . 3
Common ost0sBotk$h�gogl$ trte5spa;ivalye15�u22�r * d
149,89 ,281 an 1`4,�� ,g�1 751.1 748.9 722 . 4
Additional paid-in capital 428.1 417 .9 286 . 7
Retained earnings 818.3 779.7 600 . 6
Foc4ign currency translation
adjustmeaanaat YY aatt 44 qm��gg - (0. 4) 3 .2
LshareaellJre6!to!li,Z84can4�49'e79n (3.8) (3.6) (1 . 0)
Less unearned restricted stock (9.0) (9.3) (9 .1)
Less equity of Finance Companies - - -
Total common stockholders ' equity 1,984.7 1,933 .2 1, 602.8
$18,223.8 $ 9,852.4 $10,301 . 5
The accompanying notes are an integral part of the consolidated
financial statements.
5
n1§91 BAgIC FMOA !gMPAAi 1490 G§91 AT
99f1 AU5INANMA99MPANIEA
19! U?§906,
$ 1,454.1 $ - $ 2, 027 .6 $ 191 . 5 $ 256 .9 $ 141 . 8
y4g155. g4 59g5434 .77 779697 .69
1 185:7 2'581 :3 1'244:8 54. 4 39 .2 50.6
219 .1 274.8 468.4
85.4 51g:1 46:73
4,154.4 3,609 .0 4 , 163 .9 465. 0 570.9 660.8
1,754. 3 1,886.8 2, 170. 8 - - -
1,079.3 1,066.4 1, 316 .9 - _ -
400.0 400.0 - 30.0 30.0 30.0
356 .1 356.1 356.3 - -
751.1 748.9 722.4 0.5 0,5 0.5
428.1 417.9 286.7 69.7 69.7 69.7
818.3 779.7 600.6 22.8 21.8 16.9
- (0.4) 3 .2 0.5 0.8 0.9
(3.8) (3.6) (1. 0) - - -
(9 .0) (9.3) (9.1) - - -
(93.5) (92.8) (88.0) - - -
1,891 .2 1,840.4 1,514.8 93.5 92.8 88.0
$ 9,635.3 $ 9,158.7 $ 9,522.7 $ 588.5 $ 693.7 $ 778.8
6
CONAGRA, INC . AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars and shares in millions except per share amounts)
THGGIRTEENOWEEGRSEENDED
AUG, 25, AUG, 26,
1 1990
Net sales $ 5, 325 . 2 $ 4,,652 .6
Costs and expenses :
Cost of goods Sold 4 , 650.2 4,158. 4
Selling, administrative and g
Interest expense, net 486.7 351. 0
5,213 . 0 4,547 .8
Income before equity n earning of
unconsolidated subai�iaries and
income taxes 112.2 104.8
Equity in earnings of
unconsolidated subsidiaries 3 . 3 2.4
Income before income taxes 146.8 144.1
Income taxes
Net income 68:7 63 .1
Less preferred dividends ob 0 0.8
Net income available for common stock $ 62.7 $ 62. 3
Earnings per common and common
equivalent share S 0. 41 $ 0.45
Weighted average number of common
and common equivalent shares
outstanding 152.8 137.2
Cash dividends declared per common share $ 0,173 $ 8.150
The accompanying notes are an integral part of the consolidated
financial statements.
7
TAIRTEENOWEERSPANIED
THIRTEEN WEEKSNENDED
AUG. 99 99
25, AUG 9 906, AUG 25
11 AUG. 26,
S 5,289 . 4 $ 4 ,610 . 9 $ 35 . 8 $
41 . 7
4 , 650.2 4,158. 4
484.1 346.3 24.6
34.7
5 ,179 . 8 4,509.7 33.2
38.1
109.6 101.2 2.6
3.6
3.3 2. 5
112.9 6 (0.1)
45.4 142.3 1.4 33
1.8
66.6 60.8 1.2
1. 7
$ 61 . 5 $ 60.6 $ 1.2 $ 1.7
8
CONAGRA INC . AND SUBSIDIARIES
CONSOLIDATED STATEMENTS . OF CASH FLOWS
(Dollars in Millions)
THIRTEENOWEEKSEENDED
AUG. 25 , AUG. 26 ,
Increase (Decrease) in Cash and Cash Equivalents 1991 1990
Cash flows from operating activities:
Net income $ 68 . 7 $ 63 . 1
Adjustments to reconcile net income to net
cash provided by operating activities :
Deppreciation and amortization 77 .4 42. 8
Provision for losses on accounts receivable 6 . 5 8 .1
Unddistri ute (earnings) loss of
unconsolidate subsidiaries (3 .3) ( 2. 4)
Issuance of common stock in connection with
the management incentive plans g g gg 0
Other noncash items primarily interest 23 :3 3 :2
Change in assets and liabilities before
effects from business acquisitions:
Accounts receivable (429 .9 ( 566.4
Inventory (465 . 2 (19 9
Prepaid expenses ((11 1 2 . 3
Accounts payable and accrued expenses (85 .1 (648.0
Interest and income taxes payable 43 55 (15 .2
Noncurrent deferre income taxes 0 :3 1. 6
Net cash flows from operating activities ( 1, 538.1) (1,237. 4)
Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment 23 .4 2.7
Additions to pro ert , .plant and equipment (88. 3) (49.2)
( Increaseldecreate ih investment id
unconsolidated subsidiaries (1 .3) (4. 4)
Change inequity of finance companies _ _
Increase in trademarks - (0. 1)
Payment for business acquisitions Z) (628. 1)
(6 . 11
Other items
Net cash flows from investing activities (72 .4) (678 . 0)
Cash flows from financing activities:
Net short term borrowings 1, 388.7 1,753 .9
Proceeds from issuance of long-term debt 4.7 270.0
Proceeds from exercise of employee stock
options 3 .4 2.5
Cash dividends paid (3 3 ' 18 .4)
Repayment of long-term debt (282.93 (37.8)
Treasury stock purchases ( 0. ( 0. 1
Other items, primarily reduction of other
noncurrent liabilities in fiscal 1992 (69.9) 1. 4
Net cash flows from financing activities 1, 012 .5 1,971. 5
Net increase (decrease) in cash s cash equivalents ( 598. 0) 56 .1
Cash and cash equivalents at beginning of year 721 .9 126 . 2
Cash and cash equivalents at end of period $ 123.9 $ 182. 3
9
BASIC
SGPENDED THGGIRT2EEN WEEKGGSNENDED
AUGI991 ' AU?1906, AU14915, AU? 906,
$ 67 .5 $ 61. 4 S 1.2 S 1 .7
76.0 47:6 0.5 0.5
(3 .3) (2.5) - 0.1
23.3g 3.2 _ _
(638.1 (498. 0 108.6 (78 .4)
( (5g `1( 6 8 0 g1 48.g9
(840.663 (6956;5 (10.81 438.32
.3 1.6 _ _
(1,630.1) (1,271.8) 92 . 0 34.4
23.3 2.6 (0.2) (8.4)
( (68.31) (48.88)
26.2) (0.4)
- 280.13 (26.2) (0.1)
(3.0) (6 (2.5) (3 .2) 3.6
(42.9) (681.2) (29.5) 3.2
1,454;1 1,810:¢ (65.3) (55.7)
2 2.5a
((3 ( _
(280.9 (31. � _ -
(B. I
(69 .8) 1.4 (0.1) -
1,075 77 .9 2,027 .2 (6(5 .4) (55.7)
(672.4) 47.2 49.5) (78.8)
$ 77.3 $ 121.4 46.6 60.9
10
CONAGRA, INC . AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25 , 1991
(1) The information furnished herein relating to interim periods has
' not been examined by independent Certified Public Accountants .
In the opinion of management, all adjustments necessary for a
fair statement of the results for the periods covered have been
included. All such adjustments are of a normal recurring
nature. The accounting policies followed by the Company, and
additional footnotes , are set forth in the financial statements
included in the Company' s 1991 annual report, which report was
incorporated by reference in Form 10-R for the fiscal year ended
May 26, 1991 . All historical financial information has been
restated for the pooling of interest transaction described in
Note 3 .
(2) The composition of inventories is as follows (in millions) :
AUG. 25 , MAY 26, AUG. 26 ,
1991 1991 1990
BASIC FOOD COMPANIES
Hedged commodities S 628 .0 $ 520 .2 $ 528 .7
Food products 1,039 .3 799.8 1, 121 .8
Agricultural chemicals,
fertilizer and feed 372 .7 186 .9 365 .1
Retail merchandise 116.5 118.8 106 . 0
Other, principally
ingredients and supplies 310.6 376.2 224 . 3
2,467 .1 2, 001.9 2, 345 .9
FINANCE COMPANIES
Livestock 125 .6 125.5 111. 1
$ 2, 592.7 $ 2,127 .4 $ 2, 457 . 0
11
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25 , 1991
( 3) On July 11, 1991 , Golden Valley Microwave Foods, Inc. (Golden
Valley) merged with ConAgra through an exchange of .5676 of a
share of ConAgra common stock for each share of Golden Valley
common stock . ConAgra issued 10 .0 million shares of common stock
for Golden Valley' s 18 .8 million shares of common stock and
assumed outstanding options now exercisable for approximately 0 .7
million shares of ConAgra common stock . In addition, outstanding
warrants for 0 .6 million shares of Golden Valley stock were
converted to warrants to purchase 0 .3 million shares of ConAgra
common stock at $60 .48 per share. The transaction has been
accounted for as a pooling of interests. The historical
financial statements of the Company have been restated to give
effect to the acquisition as though the companies had operated
together from the beginning of the earliest period presented.
Fiscal 1991 first quarter results before pooling were net sales
54 ,487 .4 million, income before income taxes $96 .6 million, and
net income $58.0 million. Earnings per share were 45 cents
before and after pooling.
Golden Valley is a leader in the development and marketing of
foods specifically for preparation in microwave ovens. Products
include popcorn, french fries, breakfast foods and sandwiches
distributed through the vending industry, mass merchandising
outlets and grocery stores. Golden Valley's sales were S172 .3
million in the fiscal year ended December 1990 .
12
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25, 1991
The following summary, prepared on a proforma basis , combines the
consolidated results of continuing operations for the Company
with those of businesses acquired during fiscal 1991 as if they
had been acquired as of the beginning of that year . ( in millions ,
except per share amounts) .
THIRTEEN WEEKS ENDED
AUGUST 25 , AUGUST 26 ,
1991 1990
Net sales S 5 , 325 .2 S 5, 566 . 0
Net income 68.7 42.7
Earnings per common and common
equivalent share 0. 41 0 .25
Proforma information does not purport to be indicative of the
results that actually would have been obtained if the combined
operations had been conducted during the periods presented and is
not intended to be a projection of future results .
13
CONAGRA, INC . AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25, 1991
(4) With the Company ' s acquisition of Golden Valley during the first
quarter of fiscal 1992 (See Note 3) , its equity interest in
Lamb-Weston was increased from 47 .5 to 95 percent. The
consolidated financial statements as restated for the pooling of
interests now include Lamb-Weston, which was previously
accounted for under the equity method of accounting. At August
25, 1991, the Company had equity interests in Saprogal (100
percent) , Sapropor (75 percent) , Trident Seafoods (50 percent)
and Australia Meat Holdings (50 percent) . The summary financial
information of these companies and certain other individually
insignificant businesses accounted for on the equity basis, as of
the end of each period presented, is set forth below and includes
amounts since date of acquisition of each respective equity
interest (in millions) :
Aug . 25, May 26, Aug . 26,
1991 1991 1990
Current assets $ 449.3 $ 378.9 $ 282 . 5
Noncurrent assets 378.3 362.1 207 . 5
Total assets 827 . 6 741 . 0 490 . 0
Current liabilities 307 .6 336.2 256 . 6
Noncurrent liabilities 210,9 98.0 77 . 0
Total liabilities 518 .5 434.2 333 .6
Net assets $ 309 .1 $ 306.8 $ 156 . 4
a sasaaa:aa aa��
ConAgra 's investment $ 181 .0 $ 176.4 $ 102 . 0
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Thirteen
Weeks ended
Aug. 25, Aug. 26 ,
1991 1990
Net sales $558.0 $286 . 8
Net income 6. 4 3 . 8
ConAgra 's equity in
earnings 3. 3 2 . 4
14
CONAGRA, INC . AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25, 1991
(5) Following is a condensed statement of common stockholders '
equity ( in millions) :
Add ' 1
Common Paid—In Retained Treasury
Stock Capital Earnings Stock Other* Total
Balance at 5/26/91
as reported $ 698.9 $ 439 .3 $ 692.5 $ (3 .6) $ (9 .7) $ 1, 817 . 4
Restatement for
pooling 50.0 (21.4) 87 .2 115 .8
Balance 5/26/91 as
restated $ 748.9 $ 417 .9 $ 779 .7 $ ( 3 . 6) $ (9 .7) $ 1 , 933 . 2
Shares issued in
connection with
employee stock
option and
incentive plans 2.2 9 .8 12. 0
Amortization of
restricted stock
awards 0. 3 0 . 3
Equity transactions
of pooled company 0.4 0 . 4
Treasury stock
purchases ( 0.2) ( 0 . 2)
Foreign currency
translation
adjustment 0.4 0. 4
Cash dividends
declared (30.1) (30.1)
Net income 68.7 68 .7
Balance 08/25/91 $ 751.1 $ 428.1 S 818.3 $ (3.8) $ (9 . 0) S 1, 984 .7
.s:ss easaxax aesmsaeee
* Other includes foreign currency translation adjustment and
unearned restricted stock.
15
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25 , 1991
(6) With respect to operations of the Company excluding the
transaction discussed below, there is no litigation at August 25 ,
1991 which, in the opinion of management, would have a material
adverse effect on the financial position of the Company.
On August 14 , 1990, ConAgra acquired Beatrice Company. Beatrice
and its subsidiaries are engaged in various litigation
proceedings incident to their respective businesses and in
various environmental and other matters. Beatrice and various of
its subsidiaries have agreed to indemnify divested businesses or
the purchasers thereof for various legal proceedings and tax
matters. The federal income tax returns of Beatrice and its
predecessors for the fiscal years ended 1985 through 1987 are
currently under audit by the Internal Revenue Service. Beatrice
is currently negotiating with the Appellate Division of the
Internal Revenue Service proposed deficiencies previously claimed
for fiscal years ended prior to 1985 (principally fiscal years
ended 1982 through 1984) . Additionally, the federal income tax
returns of Norton Simon, Inc. ( "NSI") , a wholly-owned subsidiary
of Beatrice, have been audited by the Internal Revenue Service
for the fiscal years ended 1982 and 1983 and a report has been
issued. NSI has timely protested the findings contained in the
examining agent 's report and is negotiating with the Appellate
Division of the Internal Revenue Service in an attempt to resolve
disputed items . Various state tax authorities are also examining
tax returns of Beatrice and its predecessors for prior taxable
years, including, in the case of one state, years back to fiscal
1978. Beatrice expects that additional claims will be asserted
for additional taxes. It is not possible at this time to
determine the ultimate liabilities that may arise from these
matters which at any given point in time will be at various
stages of administrative and legal proceedings and will aggregate
hundereds of millions of dollars. Beatrice has established
substantial reserves for these matters which are reflected as
liabilities on its consolidated balance sheet. The liabilities
include interest accrued for tax claims.
After taking into account liabilities that have been recorded and
possible recoveries from third parties, management is of the
opinion that the disposition of the above matters will not have a
material adverse effect on ConAgra 's consolidated financial
condition.
16
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 25 , 1991
(7) Statement of Financial Accounting Standards No. 106, Employers '
Accounting for Postretirement Benefits Other Than Pensions, was
issued in December 1990 and requires implementation by the
Company by fiscal 1994 . The Company has not determined the
method of adoption and cannot reasonably estimate the impact that
adoption is expected to have on its financial statements .
(8) Earnings per common and common equivalent share are calculated on
the basis of the weighted average outstanding common shares and,
when applicable, those outstanding options which are dilutive and
after giving effect to the preferred stock dividend
requirements. Fully diluted earnings per share did not differ
significantly from primary earnings per share in any period
presented.
(9) On August 29, 1991, the Company sold $55 million of medium-term
notes due from seven to ten years from date of issue.
(10) On September 26, 1991, the board of directors of the Company
declared a quarterly common stock cash dividend of 20 1/4 cents
per share and a three-for-two common stock split, both payable
December 2, 1991 to stockholders of record November 8, 1991 . The
aggregate cash dividend will be approximately $30 million and
will be paid on a post split basis of 13 1/2 cents per share .
The three-for-two stock split will increase the Company's common
stock shares outstanding to approximately 225 million. Share and
per share amounts in the accompanying financial statements have
not been restated to reflect this pending stock split.
17
CONAGRA, INC . AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management discussion and analysis of certain
significant factors which have affected the Company' s financial
condition and operating results for the periods included in the
accompanying consolidated condensed financial statements .
FINANCIAL CONDITION
During the first quarter of fiscal 1992, the Company's capital
investment (working capital plus noncurrent assets) decreased $68. 1
million. Working capital decreased $133 .6 million and noncurrent
assets increased $65.5 million. The decrease in working capital is due
to increased short-term borrowings primarily resulting from payments on
long-term debt. The increase in noncurrent assets was due primarily to
additional brands, trademarks and goodwill related to the acquisition
of Beatrice Company, and to normal fixed asset additions.
The Company 's objective is that Basic Food Companies senior long-term
debt normally will not exceed 30 percent of total long-term debt plus
equity. For this purpose, subordinated long-term debt is excluded from
the numerator and included in the denominator. The Company's policy
has been that the Company may temporarily exceed the capitalization
ratio objective to accomplish a major strategic acquisition that
benefits stockholders ' long-term interests. The Company intentionally
exceeded its long-term debt objective in fiscal 1991 to acquire
Beatrice Company. At August 25, 1991, Basic Food Companies senior
long-term debt was 40 percent of total long-term debt plus equity
compared to 42 percent at May 26, 1991 and 54 percent at August 26,
1990. The Company intends to return to a 30 percent ratio within the
next few years .
ConAgra 's Basic Food Companies utilize short-term debt to finance the
seasonal buildup of inventory, including hedged commodities, and
receivables. The Company's objective is to eliminate all Basic Food
Companies short-term debt, except that debt incurred to finance cash
and hedged commodities, at year end.
18
CONAGRA, INC . AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
A summary of the period to period increases in the principal components
of operations is shown below (dollars in millions, except per share
amounts) .
COMPARISON OF THE PERIODS ENDED
AUG. 25, 1991 & AUG. 26, 1990
THIRTEEN WEEKS
DOLLARS 8
Net sales 672 .6 14 . 5
Cost of goods sold 491 .8 11.8
Gross profit 180 .8 36.6
Selling, administrative
and general expense 135 .7 40.1
Interest expense, net 37.7 73 .9
Income before equity in earnings
of unconsolidated subsidiaries
and income taxes 7 .4 7 .1
Equity in earnings of
unconsolidated subsidiaries 0.9 37 . 5
Income before income taxes 8.3 7.7
Income taxes 2.7 6 .1
Net income 5.6 8.9
Earnings per common and common
equivalent share (0.04) (8.9)
19
CONAGRA, INC . AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Beatrice businesses were the principal source of the sales and
gross „ rofit increase in the first quarter of fiscal 1992; higher
costs and expenses were associated with the sales increase.
The first quarter increase in earnings of unconsolidated subsidiaries
was due primarily to earnings of Australia Meat Holdings, acquired at
the end of fiscal 1991 , and increased earnings of Trident Seafoods .
These and other less significant increases were partially offset by
decreased earnings in the Company's European processing businesses .
During fiscal 1992 's first quarter, operating profit increased in all
three of the Company's food industry segments -- Agri-Products, Trading
and Processing and Prepared Foods. The Finance Companies segment
decreased. Operating profit is profit after the Finance Companies '
interest expense and short-term interest expense incurred to finance
hedged inventories, and before other interest expense, unallocated
expense and income taxes .
The Company 's largest industry segment, Prepared Foods, had an increase
in operating profit driven by the Beatrice businesses which were with
ConAgra for only the last two weeks of last year 's first quarter.
These businesses -- Hunt-Wesson, Swift-Eckrich (now Armour
Swift-Eckrich) , and Beatrice Cheese -- each contributed to the first
quarter increase.
Heavy marketing spending and a competitive environment contributed to
an earnings decline in consumer frozen foods. Fresh red meat and
chicken products earnings were also down versus last year 's first
quarter with industry supplies in the chicken products business at
excessive levels. Earnings in the turkey products and seafood
businesses increased from last year 's first quarter.
20
CONAGRA, INC. AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating profit increased in the Company 's Trading and Processing
industry segment in fiscal 1992 's first quarter . The sources of the
gain included flour milling, the dry edible bean business and a
contribution from businesses acquired after last year 's first quarter ,
including beef, malt and wool operations in Australia. Grain
merchandising earnings were down in a sluggish industry setting .
An increase in first quarter fiscal 1992 operating profit in the
Company's Agri—Products segment was led by results in the crop
protection chemicals business. The specialty retailing business also
contributed to the increase. Fertilizer earnings were down.
Pretax earnings increased less than operating profit mainly due to
higher interest expense. While pretax earnings and net income
increased, earnings per share decreased due to the increase in
preferred dividends and weighted average shares outstanding. The
Beatrice acquisition was the main reason for increases in interest
expense, preferred dividends and weighted average shares outstanding .
21
CONAGRA, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. Submission of Matters to vote of Security Holders.
ConAgra's annual meeting of stockholders was held on
September 26, 1991. In addition to the election of directors and
approval of accountants, ConAgra stockholders approved two
amendments to ConAgra's Certificate of Incorporation.
ConAgra stockholders approved an amendment to ConAgra's
Certificate of Incorporation increasing the authorized shares of
Class E Preferred Stock from 2 , 500, 000 shares to 16, 500, 000
shares. The vote on such amendment was as follows: FOR -
96, 278, 925; AGAINST - 10, 097, 497 ; ABSTAIN - 14, 807, 862 .
ConAgra stockholders also approved an amendment to Article
VII of ConAgra's Certificate of Incorporation to provide that the
authorized number of directors shall be not less than nine nor
more than sixteen members. The vote on such amendment was as
follows: FOR - 113 , 663 , 999 ; AGAINST - 5, 091, 374 ; ABSTAIN
2 , 428 , 911. -
Item S. Other Events.
Dividend Increase and Common Stock Split. On September 26 ,
1991, the Board of Directors of ConAgra, Inc. approved a 17 . 4
percent increase in ConAgra's common stock dividend, and a 3-
for-2 common stock split, both payable December 2, 1991 to
stockholders of record on November 8, 1991.
ConAgra's currant annual and quarterly common stock dividend
rates are 69 cants and 17.25 cents respectively. Following the
17 . 4 percent increase, the rates will be 81 cents and 20. 25 cents
on a pre-split basis, and 54 cents and 13 . 50 cents on a post-
split basis. The December 2 dividend will be paid on a post-split
basis. The 3-for-2 stock split will increase ConAgra common stock
outstanding from approximately 150 million shares to
approximately 225 million shares.
Class E Preferred Stock Split. ConAgra's Board of Directors
authorized ConAgra to proceed with a 100-for-1 split of the
outstanding Class E Preferred Stock; following the transactions
in connection with such stock split, each of the current 141, 955
shares of outstanding Class E Preferred Stock will (i) become 100
shares of Class E Preferred Stock, (ii) bear dividends and
liquidation preference amounts and be redeemable at 1/100 of the
current amounts, and (iii) be entitled to . 17 votes.
Ratio of Earnings to Fixed Charges. The ratio of earnings to
fixed charges for ConAgra for three months ended August 25, 1991
is 2. 1 .
22
For the purpose of computing the above ratio of earnings to
fixed charges, earnings consist of income before taxes and fixed
charges. Fixed charges, for the purpose of computing earnings are
adjusted to exclude interest capitalized and that component of
fixed charges representing ConAgra's proportionate share of the
preferred stock dividend requirement of a 50% owned subsidiary.
Fixed charges include interest on both long and short term debt
(whether said interest is expensed or capitalized and including
interest charged to cost of goods sold) , a portion of
noncancellable rental expense representative of the interest
factor and ConAgra's proportionate share of the preferred stock
dividend requirement of a 50% owned subsidiary, excluding that
which would be eliminated in consolidation. The ratio is computed
using the amounts for ConAgra as a whole, including its majority-
owned subsidiaries, whether or not consolidated, and its
proportionate share of any 50% owned subsidiaries, whether or not
ConAgra guarantees obligations of these subsidiaries.
Excluding the effect of the required consolidation of the
ConAgra businesses classified as Finance Companies, and excluding
short term interest, bank fees and unguaranteed fixed charges of
subsidiaries, the ratio of earnings to • fixed charges would have
been 2.5 for the three months ended August 25, 1991.
Item 6. Exhibits and Reports on Fors 8-K.
(a) Exhibits.
A - ConAgra Certificate of Incorporation as
amended through September 27, 1991.
B - Amended and Restated Warrant to Purchase
ConAgra Common Stock dated as of
September 19, 1991.
C - Amendments to Registration Rights and
Standstill Agreement among ConAgra and
certain former stockholders of Beatrice
Company.
D - Statement Re: Computation of Ratio of
Earnings to Fixed Charges.
(b) Reports on Form 8-K.
ConAgra filed a Form 8-K dated July 11, 1991,
which reported the merger by which Golden Valley
Microwave Foods, Inc. became a wholly-owned
subsidiary of ConAgra. ConAgra filed a Form 8-K
dated September 26, 1991 reporting the common
stock dividend increase, the common stock split,
the amendments to ConAgra's Certificate of
23
Incorporation, and the authorization for a
Class E Preferred Stock split, all of which are
described in this Form 10-Q.
Signatures
Pursuant to the requirements of the Securities and Exchange
Act of 1934 , the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
ON , C.
BY ►J `.
L. B Thomas
Seni r Vice President ,
Fi ance and C rporate
"'eta
By
Dw gh Gosle
Vice President, Controller
Dated this 8th day of October, 1991.
24
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CONAGRA, INC. FISCAL 1991 ANNUAL REPORT
Erga
FEEDING
PEOPLE
BETTER
CONAGRA, INC.
ConAgra is a diversified family of cheeses,potato products,beef, pork,lamb,
companies operating across the food chain. chicken, turkey,seafood,specialty retailing,grain
Our products range from convenient prepared and pulse merchandising,worldwide trading,
foods for today's busy consumers to supplies commodity futures,grain processing,crop
farmers need to grow their crops. protection chemicals,fertilizer and animal feed.
We have major businesses in branded
shelf-stable and frozen foods, processed
meats,
(FEEDING PEOPLE BETTER
At ConAgra, our business is helping to feed people better.
Every day, ConAgrans help feed people better in many ways...developing new products to
meet consumers' needs, ensuring quality in our products and services, serving our customers better,
working in partnership with farmers and ranchers and doing our jobs efficiently and effectively.
This annual report discusses many of the ways we are working to help feed people better today.
But we also are deeply concerned about the long-term mission of feeding people better in our
world.We believe worldwide economic growth is an essential prerequisite for giving our children and
grandchildren a better future.The needs and aspirations of a world population projected to grow from
5.3 billion today to 8.5 billion by 2025 cannot be met without economic growth.We also must
protect and nurture our environment in order to give our children and grandchildren a better future.
Consequently, industry needs to move toward more environmentally sustainable forms of
economic progress. Sustainable growth and development will require production systems which
maximize use of renewable resources and minimize non-usable waste.We intend to do our part.
We believe there are ways to achieve the worldwide economic development required to feed, clothe
and shelter billions more people on the planet and to produce a better quality of life for billions
of people.
ConAgra is one of nine U.S. companies on the international Business Council for Sustainable
Development.We are working with 44 other leading companies from around the world in an
attempt to offer real solutions to the United Nations Earth Summit in the summer of 1992.
At ConAgra,we are working to feed people better today—and tomorrow.
CONTENTS
Fiscal 1991 Highlights 1
Letter to Stockholders 2
Objectives & Results 4
Business Review
Overview of ConAgra's Businesses 6
Sales &Operating Profit by Segment 7
Prepared Foods 8
Trading & Processing 18 _
Agri-Products 22
Finance Companies 26
Management Discussion &Analysis �7
Eleven-Year Results 32
Corporate Citizenship 34
Principal Officers 36
ConAgra Locations 38
Board of Directors 40
Responsibilities, Independent
Auditors' Report 41
Financial Statements &Notes 42
Investor Information Inside Back Cover
(FINANCIAL HIGHLIGHTS
Dollars in millions except per share amounts
Fiscal Year Ended May 26, 1991 May 27, 1990 % Increase
Net sales $19,504.7 $15,501.2 25.8%
Income before income taxes $515.2 $356.9 44.4%
Net income $311.2 $231.7 34.3%
Income per share
_ Net income $2.13 $1.87 13.9%
Net income less
nonrecurring items $2.13 $1.85 15.1%
Cash dividends paid per
share of common stock $.67 $.58 15.5%
Return on year-beginning
common stockholders equity 20.2% 24.3% all
At Year End
Annual dividend per share $.69 $.60 15.0%
Invested capital $5,332.9 $1,836.7 190.4%
Total assets $9,420.3 $4,804.2 96.1%
Common stockholders' equity $1,817.4 $1,095.8 65.9%
Shares of common stock
outstanding 139,674,003 122,729,283 13.8%
Number of employees 74,718 58,369 28.0%
Note: Fiscal 1990 results include a first quarter pretax gain of$6 million from nonrecurring items. The net gain after tax was
$2.1 million,or 2 cents per share. �7-
TISCAL 1991 HIGHLIGHTS
• Met or exceeded return on equity, trend line • Acquired the Elders malt and wool businesses
earnings growth and dividend growth objet- and 50%of the Elders beef business,
tives for 16th straight year—see pages 4 establishing an important new operating and
and 5. export base in Australia.
• Reported record sales and earnings for 11th • Early in fiscal 1992, acquired Golden Valley
straight year. Microwave Foods, Inc., adding a strong
• Increased dividend 15%.The common stock presence in the snack food market, strength
dividend per share has more than quadrupled in vending sales and distribution and
over the last 10 years. leadership in microwave technology.
• Acquired Beatrice Company, a major food • ConAgras common stock price increased
company with leading brands, strong sales 48% in fiscal 1991. Over the last 10 calendar $20,475
and distribution systems and sales over years, ConAgra's average annual return to
$4 billion. investors was 25.5%.
• Expanded Healthy Choice into new 450 shares
5/26/91
categories and achieved sales of more than (aftrr3 stock splits)
$300 million in the brand's second year. 67°
COMMON STOCK CASH DIVIDENDS 586 10-YEAR GROWTH OF A 100-SHARE
INVESTMENT IN CONAGRA STOCK $13,838
506 Additionally,dividends paid over the
10-year period totaled$1,631.
436
$10,275
376
326 $8363$8025$8325
206
256
226 $5188 I H
196
100 1351
,hare,
p $2630
i/29 ix� 91®$2® �
10 OUR STOCKHOLDERS, EMPLOYEES AND FRIENDS
Each year in this letter we try to explain what makes ConAgra tick. In other words: What are the
keys to whatever long-term success our company has achieved and plans to achieve in the future?
First,however, it's important to review briefly in this letter the year behind us and the year in
front of us. Let's do just that, then turn to ConAgra's enduring fundamentals.
FISCAL 1991: RECORD RESULTS
Here are a few highlights of fiscal 1991:
• Net earnings per share from operations increased 15 percent.
• Fiscal 1991 was ConAgra's 11th straight year of record sales and earnings.
• The Beatrice acquisition surpassed the expectations we shared with you a year ago. The Beatrice
businesses performed ahead of plan and added to ConAgra's earnings per share.
• We invested $332 million in our plants, equipment, technology and new product activity to build
future earning power.
• Our stockholders enjoyed a 15-percent dividend increase and a 48-percent increase in ConAgra's
stock price.
FISCAL 1992 OUTLOOK: RECORD EARNINGS
We expect another year of record earnings in fiscal 1992. Earnings per share in the first quarter,
when the Beatrice businesses are at their seasonal low point,could be at or under the prior year's
results, but we expect to do very well for the full year. In fact, our operating plans indicate earnings
growth in ConAgra's three major industry segments—Prepared Foods,Trading&Processing and Agri-
Products—resulting in the earnings per share gain we anticipate in fiscal 1992.
CONAGRA'S ENDURING FUNDAMENTALS
Now let's get back to"ConAgra 101," the basics that define and drive our company. ConAgra has
been built on four enduring fundamental goals that have served us well for 15 years and will continue
to serve us.
1.ESTABLISH LEADING POSITIONS ACROSS THE FOOD CHAIN.
First,we have chosen to invest in growth across the food chain.
Our food chain strategy gives us far more room to grow than if we constrained ConAgra to a few
sectors of the food industry. For example, even at$20 billion in sales, ConAgra still represents only
about two percent of the U.S. food industry and .2 percent of the worldwide food industry. The rest
represents opportunity.
ConAgra's diversified food chain business mix also helps us hedge uncertainty and balance earn-
ings over time.As food industry and general economic factors change, often the same factor which
affects one business negatively will help another.
Fifteen years ago, ConAgra didn't have a leadership position in any business or market—unless we
defined the market narrowly enough. Today, ConAgra has about 25 major businesses with leading
positions across the food chain.Yet, as I suggested earlier,we have plenty of room to grow and a far
stronger platform from which to grow.
2. STRUCTURE FOR ENTREPRENEURIAL, RESULTS-ORIENTED LEADERSHIP.
In 1976,we set down in a little booklet called"ConAgra's Philosophy" the pillars of the organiza-
tional climate we strive for, including openness, trust, freedom to challenge, freedom to act, freedom
to fail, and responsibility for end results. Our organizational climate is geared to nourish ConAgra's
IOC, or Independent Operating Company,structure and process.
The IOC structure empowers the leaders of ConAgra's individual businesses with real respon-
sibility for planning, execution and, above all, results.The IOC structure fosters entrepreneurial
behavior that comes with a sense of ownership. It helps us attract and retain the best food industry
leaders—people who thrive on commitment, responsibility and results.
ConAgra's IOC structure simplifies and facilitates management of our many, diversified
businesses.We don't have layers of corporate bureaucrats impeding IOC decision-making and action.
However, ConAgra is not a holding company.We stay very close to our businesses, particularly
through our planning process, controlling the input and withdrawal of capital,selecting key execu-
tives, and offering a little advice now and then.
3. COMMIT TO PREMIUM LONG-TERM FINANCIAL OBJECTIVES.
ConAgra's, and each IOC's, most important financial objective is to average more than a 20-per-
cent return on year-beginning common stockholders'equity. Our return was 20.2 percent in fiscal
1991;the five-year average is 22.8 percent.
Our earnings growth objective is to increase trend line earnings per share,on average,more than
14 percent per year. ConAgra's trend line earnings per share growth has been running close to 17 per-
cent as shown on pages 4 and 5 of this report where our financial objectives and results have been
shared with you year after year.
Please note that we stress long-term results—premium returns,premium earnings growth and
premium dividend growth over time.We will not short-term our businesses to achieve stairstep earn-
ings and jeopardize ConAgra's long-term vitality.
ConAgra has met its return on equity,earnings growth and dividend growth objectives for 16 straight
years.Importantly,our company has built this record by investing ConAgra's cash flows in real growth,
not via major stock repurchases that were commonplace in the food industry during the past decade.
As I noted here last year,we would temporarily exceed our self-imposed balance sheet objective to
acquire Beatrice, a major strategic opportunity serving our stockholders' long-term interests. We plan
to meet our balance sheet objective within the next few years.
Beatrice also helped us sharply increase ConAgra's cash flows. Free cash flow(net income plus
depreciation and amortization minus dividends)jumped 59 percent in fiscal 1991 to$463 million
from $292 million. Substantially stronger cash flow will enhance our ability and flexibility to strengthen
our balance sheet and invest in ConAgra's growth.
4. REWARD OUR STOCKHOLDERS.
As we meet our premium long-term financial objectives,ConAgra's stockholders will enjoy premium
long-term returns.
We have met our financial objectives,and it has worked out pretty well for our stockholders. I like
to use an example which is very real for our readers who took the plunge or kept the faith as we began
to build a new ConAgra.
Let's say you bought 10,000 shares of ConAgra stock, at$3 per share at the low in fiscal 1975.At
the end of fiscal 1991,you would have owned 135,000 shares, due to stock splits, and your$30,000
investment would have grown to more than$6 million. Plus dividends along the way.
So that's us, really just four enduring fundamentals that make ConAgra tick.We'll stick to these Left to right:
four fundamentals and will contiue to count on the people who make it happen—4,000 ConAgrans Phil Fletcher,President and Chief
15 years ago,75,000 today,working to help feed people better. Operating Officer
I'd like to recognize some special people who retired from our family this past year. Claude Carter Mike Harper, Chairman and Chief
gave ConAgra nearly 50 years of extraordinary service, including duty as president, Executive Officer
chief executive officer,vice chairman and more than 25 years as a board member.
Senior vice president Tom Peters was ConAgra's Mr. Controller, contributing a
wonderful blend of corporate conscience, keen insight and innovation.John
Phillips successfully led and grew our Prepared Food Companies as their President "` ! i
and Chief Operating Officer, then rode herd on the design and construction of our
Omaha headquarters campus.Vice President Marry Colladay brought purpose,
vitality and values to ConAgra's government and community programs. Probably
most important, their successors are prepared to do a great job for our shareholders.
We also welcome new members of ConAgra's board of directors, Kevin Bousquette, f Y
Michael Tokarz and Stephen Wolf.
We usually close this letter with well-deserved thanks to all the people who
support ConAgra. Instead, this year I'll ask our stockholders, employees,cus-
tomers, suppliers and communities to join us in congratulating and expressing
heartfelt gratitude to America's courageous military men and women of Desert
Storm.We're proud of you!
—421
CHARLES M.HARPER
Chairman and Chief Executive Officer
July 18, 1991
OBJECTIVES & RESULTS
ConAgra is committed RETURN ON COMMON EQUITY EARNINGS GROWTH
to major financial
performance objectives Objective Objective
which guide us in
fulling our ConAgra's most important objective is to ConAgra's objective is to increase trend line
responsibility to average more than a 20-percent after-tax return earnings per share,on average, more than 14
our stockholders. on year-beginning common stockholders' equity, percent per year. The cyclical nature of some of
and to earn more than a 15-percent return in our basic food businesses does not always permit
any given year. quarter-to-quarter, or sometimes year-to-year,
In the table below, the fiscal 1991 result increases in reported earnings. However,
includes a pro rata share ($348.1 million) of the ConAgra expects to increase trend line earnings
common equity associated with the acquisition —what we would earn with average or normal
of Beatrice Company and a public offering of industry conditions—more than 14 percent
common stock. In fiscal 1990,excluding a per year.
nonrecurring gain,the return on year-beginning In the graphic below, "14%trend line
common equity was 24.0 percent. objective" represents a compound annual growth
rate of 14 percent from a base that is the 3-year
average of earnings per share for fiscal years
1980, 1981 and 1982.The"result"percentages
show actual compound annual growth rates
from the base, for example 16.3 percent for the
10 years to fiscal 1991, 16.6 percent for the nine
years to fiscal 1990,etc.
Result Result
■14%Vend
Line Objective
'87 23.4%
'88 21.5%
'89 24.5%
'90 24.3% $1.23 $1.29 $1.63 $1.87` $2.13
'91 20.2%
'87 '88 '89 '90 '91
RESULT
17.4% 15.5% 16.8% 16.6% 16.3%
5-YEAR AVERAGE: 22.8% 5-YEAR AVERAGE: 16.5%
`Excluding nonrecurring items,focal 1990 earnings
per share were 51.85
FINANCING DIVIDEND GROWTH
Objective Objective
ConAgra's primary financing objective is to ConAgra's objective is to increase dividends
maintain a conservative balance sheet.As consistent with growth in trend line earning power.
explained below, ConAgra's long-term debt Over time,we expect dividend payments to
objective was updated in fiscal 1991. average in the range of 30 to 35 percent of
LONG-TERM DEBT earnings.
Fiscal 1991 and subsequent years: Basic Food
Companies' senior long-term debt normally will
not exceed 30 percent of Basic Food Companies'
total long-term debt plus equity. Long-term
subordinated debt is treated as equity due to its
preferred stock characteristics.
Prior to fiscal 1991: Basic Food Companies'
long-term debt normally will not exceed 35
percent of Basic Food Companies' total
capitalization—long-term debt plus equity plus
deferred taxes.
SHORT-TERM DEBT
Each ConAgra Basic Food business will
normally eliminate at the end of its natural fiscal
year short-term debt, net of cash, used to finance
assets other than hedged commodity inventories.
As is customary in their industries, the Finance
Companies will have short-term debt at year end
to finance notes receivable,livestock on feed and
open customer transactions.
Natural year end occurs when inventories
and receivables are at their annual low points—
for example, the end of February in our crop
protection chemicals and fertilizer businesses,
and the end of May in many other businesses.
Result Result
DIVIDEND RATE AT YEAR END
Long-Term Debt Net Short-TermDebt 5-year compound annual
Objective Result Result growth rate:15.9%
Maximum of
(as defined above)
'87 35% 34°/o 0
111
'88 35% 35% 0
'89 35% 35% 0
'90 35% 35% 0 eoc
'91 30% 40% 0
ConAgra may temporarily exceed its long-term debt
objective to accomplish a strategic acquisition
benefiting our stockholders'long-term interests.The '87 '88 '89 '90 '91
Beatrice acquisition was such an opportunity.
ConAgra plans to meet its long-term debt objective Over the last five years, dividends per share have
within the next few years. averaged 31.3 percent of earnings per share.
BUSINESS REVIEW
BUSINESS REVIEW TRADING &PROCESSING
ConAgra is a family of independent Commodities, food ingredients and
operating companies. Our management pro- processed products primarily serving food
cess blends planning, financing and essential industry customers in domestic and
corporate controls with decentralized manage- international markets. Our Trading&
ment teams fully responsible for ConAgra's Processing businesses include:
independent operating companies. • Flour milling— flour for commercial
Our independent operating companies are in bakeries and pasta produccrs.
two groups: Basic Food Companies and Finance • Oat milling, dry corn milling and
Companies.The Basic Food Companies,which barley processing.
include most ConAgra businesses,operate in
three industry segments of the food chain: • Natural spices, seasonings, flavors and
NB Prepared Foods,Trading&Processing and Agri- spray-dried food ingredients.
Products. ConAgra has no objectives that relate • Feed ingredient merchandising.
to the balance between these segments.We • Worldwide commodity trading(grains,
intend to grow in all of them. oilseeds, edible beans and peas, food
SALES OPERATING PROFIT products and ingredients,wool, fishmeal,
Bolo 15% sulfur and other commodities).
12.5% 10.8%
•
Food processing and distribution in Asia,
Australia, Europe and Latin America.
9.5% 11.5%
AGRI-PRODUCTS
Products and services primarily for
agricultural markets and communities. Our
77.1% 762% Agri-Products businesses include:
•PREPARED FOODS ■AGRI-PRODUCES • Marketing and distribution of crop
■TRADING&PRO(ESSING FINANCE COMPANIES protection chemicals in the U.S. and Canada.
PREPARED FOODS • Marketing, transportation and distribution
Prepared food products and services for of fertilizer products worldwide.
consumer and foodservice markets. Our • Animal feeds and nutrient additives for
Prepared Foods businesses include: animal feeds.
• Branded shelf-stable foods—tomato • Health care products for livestock.
products, cooking and salad oils, popcorn, . 189 retail stovesprincipallyin U.S.
peanut butter, puddings, cocoa mixes, sloppy 9 retail stores
areas sellig merchandise for
loo sauce,Oriental products and Mexican country living, fabrics and craft supplies.
products.
• Branded frozen foods—dinners, entrees, • High-quality natural lactic acid, and
fried chicken, boneless chicken,breakfast degradable polylactides under development.
products, meat pies and desserts. FINANCE COMPANIES
• Beef, pork and lamb products. Specialized, self-financed financial services
• Branded chicken and turkey products. related to the food industry. Borrowings of our
• Branded processed meats—hot dogs, Finance Companies are not guaranteed by the
ham, bacon, lunch meats and sausage. parent company. Our Finance Companies
include:
• Seafood products—shrimp, cod,ocean • Commodi futures brokerage.
perch, crab,salmon, herring, pollack,
halibut, scallops, oysters, flounder, farm- • Financing and ownership of livestock
raised catfish and surimi. on feed.
• French fries and other frozen potato products. • Truck financing and leasing and insurance
• Cheeses and refrigerated dessert toppings. services for red meat businesses.
• Delicatessen and foodservice products.
• Premium food products marketed
by direct mail.
• Pet accessories, home sewing accessories.
(SALES & OPERATING PROFIT BY SEGMENT
Dollars in millions
- Fiscal Year 1991 1990 1989 1988 1987
BASIC FOOD COMPANIES
Prepared Foods
Sales $15,045.5 $11,031.7 $7,084.9 $6,132.5 $5,854.2
Percent of total 77.1% 71.2% 62.5% 63.8% 64.0%
Operating profit 663.0 349.2 293.1 205.0 259.4
Percent of total 76.2% 63.5% 62.6% 59.7% 69.5%
69%of sales and 68%of operating profit over these five years
Trading & Processing
Sales 1,862.0 1,959.2 1,869.0 1,379.9 1,469.1
Percent of total 9.5°/0 12.6% 16.5% 14.4% 16.1%
Operating profit 100.1 97.5 83.4 72.7 53.4
Percent of total 11.5°/0 17.7% 17.8°/o 21.2% 14.3%
13% of sales and 16% of operating profit over these five years
Agri-Products
Sales 2,443.6 2,330.2 2,242.7 1,962.6 1,678.2
Percent of total 12.5% 15.0% 19.8°/o 20.4% 18.4°/o
Operating profit 94.0 87.2 82.1 55.9 54.9
Percent of total 10.8% 15.9% 17.5% 16.3% 14.7%
16% of sales and 14% of operating profit over these five years
TOTAL BASIC FOOD COMPANIES
Sales 19,351.1 15,321.1 11,196.6 9,475.0 9,001.6
Percent of total 99.2% 98.8% 98.7% 98.6°/o 98.4%
Operating profit 857.1 533.9 458.6 333.6 367.7
Percent of total 98.5°/o 97.1%0 97.9% 97.1% 98.6%
99% of sales and 98% of operating profit over these five years
FINANCE COMPANIES
Sales 153.6 180.1 143.8 133.3 142.0
Percent of total .8% 1.2°/o 1.3% 1.4% 1.6%
Operating profit 13.1 15.9 9.7 9.8 5.4
Percent of total 1.5% 2.9% 2.1% 2.9% 1.4%
1%of sales and 2% of operating profit over these five years
TOTAL
Sales 19,504.7 15,501.2 11,340.4 9,608.2 9,143.5
Operating profit* 870.2 549.8 468.3 343.3 373.1
Interest expense-Basic Food Cos 278.4 146.2 113.2 67.4 52.8
General corporate expense 76.6 46.7 42.9 31.6 46.3
Income before income taxes $ 515.2 $ 356.9 $ 312.2 $ 244.3 $ 274.0
*Operating profit is profit after the Finance Companies' interest expense and short-term interest expense incurred to
finance hedged inventories, and before other interest expense, unallocated expense and income taxes.
Percentages may not add to 100 due to rounding.
4 `
BASIC FOOD COMPANIES:
SHELF-STABLE FOODS
HUNT[-WESSON,INC.,which joined and 14-ounce plastic bottles gave Hunt's the
ConAgra as part of the Beatrice acquisition late most extensive line of ketchup in plastic con-
in the first quarter of fiscal 1991, is one of the tainers. Shelf-stable Snack Pack Puddings were
leading packaged food companies in the United introduced in new"exposed cup" packaging that
States.Annual sales are close to$2 billion.Major allows consumers to see the pudding through
brands and products are Hunt's tomato products, the package.
Wesson cooking and salad oils,Manwich sloppy Hunt-Wesson's biggest business, Hunt's toma-
joe sauce, Orville Redenbacher's popcorn, Peter to products, increased earnings in fiscal 1991
Pan peanut butter,Snack Pack puddings,Swiss despite large tomato surpluses that pressured mar-
Miss puddings and cocoa mixes, La Choy gins. Good tomato products results were led by
Oriental products and Rosarita and Gebhardt strong showings in spaghetti sauce and barbecue
Mexican products. These products are sold sauce.The Orville Redenbacher's popcorn busi-
through retail stores and to the foodservice mar- ness had a good year but saw slower growth in "I've used Wesson for al
ket. Hunt-Wesson also boasts one of the most microwave popcorn,consistent with an industry years.My husband and I
advanced and cost-efficient shelf-stable grocery slowdown in growth.Wesson oils volumes were have become more
sales and distribution systems in the nation. fairly stable during the year;early results for the health-conscious so it
Growth in branded grocery sales slowed in new canola and olive oils were encouraging.The makes sense to use the
the second half of fiscal 1991,as the recession Peter Pan peanut butter business increased earn- new Wesson Camila Oil.
motivated consumers to pull back on overall pur- ings in spite of a weather-related peanut shortage We really like it."
chases and increase the percentage of private label that drove peanut prices up sharply. Ozzie Nogg
products purchased. Hunt-Wesson performed Early in fiscal 1992,Hunt-Wesson purchased Consumer
well in this environment though,and fiscal 1991 a tomato processing facility in California,bring-
earnings were substantially better than plan for ing the total number of tomato canneries to five.
the nine months Hunt-Wesson was part of Increased capacity will help Hunt-Wesson reduce
ConAgra.The favorable results were helped by processing costs and target new business opporm-
unit volume increases in spaghetti sauce,barbecue nities in the years ahead. Late in fiscal 1991, Vi 4
sauce,cocoa mixes and Mexican foods.Volumes Home Brands Company,a business that producessr
also were strong in specialty and international and markets preserves,jellies,peanut butter !a ,
channels. Overall lower expenses and administra- and syrups,was sold. t
tive cost savings,including an eight-percent In fiscal 1992, Hunt-Wesson
l 5
reduction in salaried payroll following an early plans increases in earnings and V ,
retirement offer,contributed to the good results. volumes, further reductions in ` 6 �,,
Hunt-Wesson introduced 41 new grocery expenses and an assort-
products and 33 new foodservice products during ment of new 4�,
fiscal 1991.Wesson became the products. III ''ntYl� ir , .#
first major American brand of f�Fr t - v8A" ii i i3��tS��N�ift
olive oil marketed nationwide .,s, ��M. t q
(Wesson Pure Olive Oil). M III a, "p�
II■ h ,ii��l�
Wesson also introduced Wesson lir • s;� I i � I in�i =
Canola Oil (the oil with the a
SEIAEIABli lowest amount of saturated fat) f 1 n
4.
eb and Wesson Lite No-Stick <_ _,j•l I
Cooking Spray. The introduction ,
CH ,eof Hunt's Ketchup in 24-ounce
_� wr
oy
�.��e�edenbachers
I. ,
�— chow
fit • ___s
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ChOCOlate NEW 911157-, I e��4 CLEAR CUP '.� .-_
TROZEN FOODS
CONAGRA FROZEN FOODS is a leading pro- including sandwiches, muffins and cholesterol-
"Healthy Choice is ducer and marketer of frozen prepared foods. free egg product. Healthy Choice frozen dairy
quick,easy and Principal brands are Banquet, Healthy Choice, dessert also was introduced and is expanding
comes in a lot of Kid Cuisine, Morton, Patio, Chun King, La into national distribution. Late in fiscal 1991,
varieties.The fact Choy,Armour Classics, Country Skillet and the ConAgra Frozen Foods entered a partnership
that it's low in fat new Ultra Slim•Fast frozen entrees.
and sodium makes with Dreyer's Grand Ice Cream, Inc. Dreyers
me feel good serv- ConAgra Frozen Foods is a market leader in will distribute Healthy Choice frozen dairy
" its major product lines. Product categories include dessert in markets served by their extensive direct
ing it to my family.
Roxanne Williams fried chicken, boneless chicken products,extra store delivery system, currently about half the
Consumer portion dinners,premium dinners, regular din- U.S. Wells Dairy of Le Mars,Iowa continues as
ners, kids' meals, meat pies, family-size entrees, a manufacturing partner for some regions of
hand-held snacks,single-serving entrees the U.S.
and frozen dairy dessert. ConAgra Healthy Choice soups,stews,pastas and chills
- Frozen Foods is one of the largest in cans and micro-cups also were tested. Early in
frozen food companies in the U.S. fiscal 1992,Healthy Choice dinners and entrees
• d •_`., Annual sales exceed$1 billion. were introduced in Canada. Every Healthy Choice
•wt < Fiscal 1991 was another record sales product meets a rigid standard of great taste cou-
and earnings year for ConAgra Frozen pled with low cholesterol,fat and sodium content.
Foods, with a dramatic unit volume Overall, ConAgra Frozen Foods introduced
increase for Healthy Choice and 122 new products in fiscal 1991. In addition to
good increases for Banquet Healthy Choice, new products included a line of
including Kid Cuisine and Ultra Slim•Fasr frozen entrees, Country Skillet
` for Morton and Patio prod- frozen chicken products sold in grocery store
ucts. Market shares meat cases, Banquet Family Pot Pies and four
increased in the key care- new Kid Cuisine meals. In the product's first full
gories of frozen meals, year on the market, Kid Cuisine frozen kids'
including dinners, entrees meals achieved category leadership and strong
y` and frozen prepared sales growth.
I 4. v!�4r� chicken. Healthy Choice The grocery store freezer case was the site of
-' (Th sales for fiscalill
exceeded$300 millseal m intense share battles, mushrooming new product
� + 9�zG� ion, introductions and a major step-up in trade spend-
Healthy Choice made a ing during fiscal 1991, but ConAgra Frozen Foods
good profit contribution in brands held their own and then some. Fiscal 1992
fiscal 1990 and a much higher will bring more of the same fierce competition,
contribution in fiscal 1991 but ConAgra Frozen Foods plans aggressive and
despite continued heavy mar- innovative new product introductions, improve-
keting spending. ments in existing product lines and significant
New Healthy Choice prod- advertising and promotional spending. We expect
ucts introduced during fiscal good increases in volumes and profit.
1991 include eight more din-
ners, 14 more entrees and a —
line of breakfast products �'hji,r.�
, Jim,
HFALTHriCHOICE �""
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POULTRY PRODUCTS
CONAGRA POULTRY COMPANY is a leading designed to produce Country Pride prepackaged
producer of chicken and turkey products for retail products for western U.S. markets.
and foodservice markets. Principal brands are
Country Pride,Country Skillet,Armour Golden CONAGRA TURKEY COMPANY results
improved modestly, but were still unsatisfactory.
Star,Turkey Selects by Armour and Water Valley
The Missouri Division showed good improve-
Foods. Companies within ConAgra Poultry dur-
ing fiscal 1991 were ConAgra Broiler Company, ment m operating results and had a good year
overall. In the California Division, good progress
ConAgra Turkey Company, Longmont Foods,
Mott's Inc and Professional Food Systems. was made on the sale of new,convenience-ori-
ented products under the Turkey Selects by
ConAgra Poultry's fiscal 1991 sales exceeded
$1.7 billion.Annual broiler chicken production Armour brand, but marketing spending and
volume was about 1.45 billion dressed pounds. other cost increases delayed improvement in
ConAgra Poultry introduced 44 new chicken division results.
Early in fiscal 1992, ConAgra Turkey SI
and turkey products in fiscal 1991.
Burdensome industry supplies of chickens Company was merged with Butterball Poultry to
and turkeys constrained market prices during form Butterball Turkey Company.This reorga-
fiscal 1991. Feed ingredient costs were slightly nizauon cakes advantage of the two companies'
below the previous year's costs. Industry broiler complementary sales, marketing and production
strengths, and better positrons ConAgra to pro-
production was up about seven percent; turkey
duce more of the convenient, value-added turkey
production, more than 10 percent. Consumer
demand showed continued strength, but products consumers are asking for.
supplies outpaced demand, especially in the LONGMONT FOODS manufactures further-
turkey industry. processed turkey products for national food-
service and regional retail customers. Fiscal 1991
CONAGRA BROILER COMPANY performed
well in a tough year. Earnings were on plan,but exults improved substantially over the previous
fiscal 1990. The year, mainly due to good cost reductions in the
well under the strong levels of
company marketing strategy continued to focus live turkey operations. However, margins for
on the Country Pride brand and to emphasize further-processed turkey products were under
pressure all year, and earnings were unsatisfactory.
boneless, marinated, convenience-oriented
With
products. Sales of Country Pride prepackaged he completion of a major plant expansion
convenience products increased 12 percent dur- and modernization and an expected easing of
ing the year. Country Pride ground chicken and pressure on margins, Longmont should improve
Fresh &Ready single-serving marinated prod-
became significantly in Fiscal 1992. (Longmont
ucts were introduced in several markets with became an Armour Swift-Eckrich company early
strong media support. Marketing spending n fiscal 1992.)
increased moderately and will increase strongly
in fiscal 1992. Multimedia advertising used the
theme, "It's hard to be humble when you're serv-
ing Country Pride."
Construction began on a$32-million broiler i i 90%I IAN
complex in northern Louisiana. The new I Fresh ,
complex,which will open late in fiscal 1992, is ,
- - i I Ground
Chicken i
''.� 100�/o Skinless Thighs
uet :�e J�TRY/'.p�
Banq w cg A6,. �� , LEAN!
&pumplin9s Dinner . ca 95%WEE
Carrots and Peas in Seasoned Sauce On/y596 Fat
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‘1? _.ED MEATS
MOTT'S INC.processes poultry products for ConAgra Red Meat Companies include
national foodservice, retail and industrial mar- Monfort, Inc., E.A. Miller Inc., ConAgra Fresh
kets. Mott's major brand is Water Valley Foods, Meats Company and Cook Family Foods, Ltd.
and the major products are pulled and diced Annual sales of these businesses are about$7.5
chicken. Motes had a disappointing year and billion.
was unprofitable. Management has been
strengthened,and a strategy is in place to increase MONFDRT produces and markets beef,pork
the sale of value-added products. Early in fiscal and lamb products for customers in domestic and
1992,Mott's was merged with Blue Coach,a international markets. Monfort also has a distri-
bution business,Mapelli Brothers Company,and
Eckrich,to form Mott's-Blue Coach.The a cattle feeding operation. E.A. Miller is a pro-
ducer of beef products principally for customers
combination will allow management to takeMt
advantage of synergistic opportunities in these in western United States markets. ConAgra Fresh
businesses and should lead[o improved results Meats produces and markets beef products to
and profitability in fiscal 1992. customers in retail, foodservtce and institutional
markets. Cook Family Foods is a leading proces-
PROFESSIONAL FOOD SYSTEMS (PFS) is sor and marketer of branded smoked bone-in
ConAgra Poultry's sales and distribution busi- ham products for retail customers nationwide.
ness,which has good distribution coverage in Late in fiscal 1991, ConAgra acquired a 50-
major regions of the U.S. PFS had another year percent interest in Elders Meat Division,a leading
of record earnings, and we expect earnings to Australian beef processor and exporter that was
increase again in fiscal 1992. part of Foster's Brewing Group Limited(former-
Fiscal 1992 will be another challenging year ly Elders IXL Limited). This business is called
for the broiler industry,with supply still ahead of Australia Meat Holdings (AMH).
demand and production expected to increase In fiscal 1991,ConAgra Red Meat processed
another five to six percent. In the turkey indus- about 5.3 million head of cattle and 10.4 million
try,slowed expansion should allow supplies to head of hogs.Annually,ConAgra Red Meat pro-
fall more in line with demand, and margins duces approximately 3.8 billion pounds of beef
should improve. ConAgra Poultry will benefit products and 1.8 billion pounds of pork products.
again from a continuing shift to more stable- At 700,000 head,fiscal 1991 cattle feeding
margin,value-added products. ,
`.
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operations represented only 13 percent of the Conditions in the lamb industry remained
needs for our U.S.plants. tough, but Monfort's lamb business improved in
In total,operating profit in the red meat fiscal 1991,thanks in part to increased production
businesses increased in fiscal 1991 on the strength efficiencies.Cook Family Foods had another
of reasonably good beef results and improvement good year,with earnings up moderately from the
in pork and lamb results. fiscal 1990 level.Cook opened a new ham pro-
Beef profitability was fairly good in fiscal cessing plant in Kentucky during the year.
1991 in light of tough industry conditions.A In fiscal 1992, ConAgra Red Meat expects
near 30-year low in the U.S. cattle herd resulted another good year in the beef business, a good
in record-high cattle prices, increased competi- contribution from Australia Meat Holdings,and
tion for a tight supply of livestock and squeezed continued improvement in the pork and lamb
margins. ConAgra beef processing results were businesses.The cattle shortage has already begun
ahead of plan and not far behind fiscal 1990.We to ease,and Monfort will continue to focus on
expect some improvement in fiscal 1992 as cattle efficient production of beef products that meet
supplies expand gradually and ConAgra Red consumer needs. Hog supplies also are easing,
Meat continues its quest to develop and market and Monfort Pork will benefit from improved
new,value-added beef products. pork industry conditions. Overall, ConAgra
Pork processing industry conditions were Red Meat plans a significant earnings gain in
even more challenging than in fiscal 1990.Tight fiscal 1992.
hog supplies,excess plant capacity and intense
competition kept the pressure on margins.
Monfort Pork improved results but was still "Monfort beef is tap-quality and
unprofitable.We expect new production effi- consistent. Monfort's been in the
beet business for se long they real-
ciencies and cost reductions to contribute to ly know the business.That's why
profitability in fiscal 1992. During the year ahead, they're one of the top beef produc-
Monfort Pork will introduce more convenient, ers in the country."
value-added pork products and will initiate a Tom O'Connor
new hog evaluation program to encourage Meat Manager
farmers to produce leaner hogs. Baker's Supermarket
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PROCESSED MEATS & DAIRY PRODUCTS
ARMOUR SWIFT-ECKRICH is a leading proces- SWIFT-ECICRICH PREPARED FOODS had a
sor and marketer of high-quality refrigerated and good year in fiscal 1991 with increased market
frozen prepared meats. Brands include Armour, shares in most categories, led by dramatic
Swift Premium, Eckrich, Butterball, Golden Star, volume and share growth in the Butterball
Decker and Webber Farms. Products include hot processed turkey products business. On the
dogs, bacon,hams, sausages and cold cuts. new product front, Swift-Eckrich introduced
Annual sales exceed$2 billion. a number of products designed to provide
Armour Swift-Eckrich, formed in fiscal 1991 consumers with convenience, nutrition and
after Swift-Eckrich joined ConAgra as part of good taste: a complete line of Butterball
the Beatrice acquisition, is made up of several Fresh from the Deli thin-sliced deli meats;
independent operating companies:Armour Butterball Turkey Bacon; Butterball Heat&
Food Company,Armour Swift-Eckrich Serve precooked breakfast sausage;a complete
aDeli/Foodservice Company, Swift-Eckrich Prepared Foods and, through fiscal 1991, line of Eckrich 90%fat-free smoked sausages,
franks and cold cuts;a line of Eckrich Lean'n
Butterball Foods. Longmont Foods, discussed in Fresh deli-thin-sliced products; and a line of
this report under Poultry Products, became an Eckrich dinner sausages. We expect fiscal
Armour Swift-Eckrich company early in fiscal 1992 to be another good year for Swift-
1992, and Butterball Turkey Company,also dis- Eckrich Prepared Foods.
cussed under Poultry Products,was created from
the merger of Butterball Poultry and ConAgra ARMOUR SWIFi EcicwcH DELI/
Turkey Company. FOODSERVICE COMPANY was created from the
During fiscal 1991,Armour Swift-Eckrich combination of the Armour and Swift-Eckrich
combined some common functions of Armour foodservice and deli businesses and ConAgra
and Swift-Eckrich to form an organization that Deli Company.The new company markets deli
preserves the independence of the independent products under the brands Armour, Butterball,
operating companies; takes advantage of comple- Eckrich, Swift Premium and World's Fare.
Armour Swift-Eckrich Deli/Foodservice had an
mentary marketing, sales and production
strengths; and consolidates some administrative excellent year,led by good volume increases in
key deli categories.A number of new deli prod-
and operating functions where independence is
not critical.The result was significant cost say- ucts were introduced to meet consumers' needs
ings,stronger marketing businesses and improved for more convenience, better nutrition and great
taste. The foodservice business benefited from
performances across the board.Armour Swift-
Eckrich introduced 61 new products in fiscal 1991. complementary production strengths of Armour
and Swift-Eckrich. For example,an underuti-
ARMOUR FOOD COMPANY improved strongly lized Armour plant allowed Swift-Eckrich to
during the year, becoming profitable in the increase production of its successful prefried
fourth quarter of fiscal 1991. Good progress on bacon business for foodservice customers.
production cost savings and a significant market- An efficient new state-of-the-art deli erod-
ing commitment began to pay off.A strong focus ucts plant in Arkansas will go onstream
on developing convenient,nutritious,good-tact- early in fiscal 1992,and will contribute
ing new products resulted in Leaner than Bacon to lower production costs and improved
(50 percent leaner);90%fat-free,low-salt ability to meet increased demand by
Armour Hot Dogs; 98%fat-free sliced, cooked retail deli operators for carryout meals,
ham;and a line of 90%fat-free turkey-based convenience foods and finger foods. fish;
smoked sausage products.We expect continued Deli and foodservice earnings and
improvement in fiscal 1992. volumes should increase again in
NORM • fiscal 1992.
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(SEAFOOD
BUTTERBALL FOODS in fiscal 1991 included ConAgra seafood companies are leaders in
Butterball Poultry(primarily whole turkeys), the U.S. seafood industry,with major businesses
Blue Coach Foods, sales and distribution units on the West, East and Gulf coasts. Total seafood
located in Panama and Puerto Rico and all sales, including two 50-percent-owned seafood
export business for Armour Swift-Eckrich. companies,exceed$700 million. Sales of 50-
Butterball Foods achieved plan in fiscal 1991 percent-owned companies are not reported in
despite a very difficult year resulting from sur- ConAgra's consolidated results.
plus turkey supplies.
Early in fiscal 1992, Butterball Turkey CONAGRA SHRIMP COMPANIES include
Company was created by combining Butterball Singleton Seafood Company, International
Poultry with ConAgra Turkey Company. Blue Seafood Traders and Waldco Enterprises.
Coach Foods was transferred to ConAgra Singleton is a leading shrimp processor, foodser-
vice supplier and retail marketer of shrimp.Other
Poultry, and a new company,Mott's-Blue
Coach,was formed. products include scallops,oysters and flounder. MI
Overall,Armour Swift-Eckrich had a very International Seafood Traders is a processor and
good year in fiscal 1991 and expects a substantially worldwide procurer, broker and marketer of
better year in fiscal 1992 as the company contin- commodity seafood.Waldco Enterprises is a
ues to focus on responding to customers and shrimp import and trading business.
consumers with creative and timely new products. Fiscal 1991 was a tough year for the seafood
industry. Prices of imported seafood were unsta-
BEATRICE CHEESE COMPANY is one of the ble,and the U.S. recession contributed to
leading producers and marketers of cheese in the decreased consumption, particularly of higher-
United States. Annual sales are about$800 mil- priced seafood and seafood served in upscale
lion. Branded products include Treasure Cave restaurants. Singleton performed well, but earn-
blue cheese, County Line natural cheeses, Pauly ings were below the record level of fiscal 1990.
cheeses for foodservice markets and Reddi-Wip International Seafood Traders improved signifi-
refrigerated dessert topping. During fiscal 1991, cantly. Results for Waldco,caught in fluctuating
an Armour cheese plant in Wisconsin became prices for imported shrimp,were unsatisfactory.
part of Beatrice Cheese, and the company In total, ConAgra Shrimp Companies' results
acquired Mazza Cheese,a distribution and moz- decreased from fiscal 1990.
zarella manufacturing business in Oregon. Singleton continued to develop products to
Fiscal 1991 was a depressed year for the help foodservice operators meet consumer demand
dairy industry. Government support prices for for lower-calorie,lower-fat seafood items.The
milk and cheese dropped, milk and cheese company successfully introduced a new line of
prices fluctuated dramatically and cheese inven- sauteed shrimp for foodservice customers and
tories grew to burdensome levels. Beatrice expanded convenient cooked shrimp offerings.
Cheese performed well in a difficult environ- Fiscal 1992 will be another challenging year
ment. Results were on plan but constrained by for ConAgra Shrimp Companies,but we expect
industry conditions.Volumes in branded cheese earnings to exceed the fiscal 1991 level.
and refrigerated dessert toppings were up signif-
icantly in fiscal 1991. In fiscal 1992,we expect COUNTRY SICILLET CATFISH COMPANY pro-
cesses and markets grain-fed, farm-raised catfish
improved industry conditions, innovative
new roducts and improved results for products for retail and foodservice customers. �z �. a
Beat rce Cheese. P During fiscal 1991,Country Skillet and Fishco,a itsiO. r.c
catfish farmers'cooperative,combined to create _ .
Confish,a 50-50 joint venture.The new structure E^
provides Country Skillet with an assured supply • 'y
.a�a
_ of catfish and limits the business'downside risk.
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Fiscal 1991 was another difficult year for the During fiscal 1991,the salmon industry was
entire catfish industry,with processors squeezed sluggish,but conditions improved in crab,Pollack
by high live fish prices and processing overcapac- and cod markets. Expanded processing capacity
ity. Country Skillet was unprofitable. from two plants that went onstream in fiscal 1990
Next year's results should be helped by new contributed to 1991 earnings.Trident's results
products introduced late in fiscal 1991, including improved substantially over fiscal 1990,and we
baked,broiled and marinated catfish products, expect further improvement in fiscal 1992.
new formed products and products designed for
school lunch programs. Country Skillet's new
structure will allow the company much more I+OODSERVICE
flexibility to overcome industry conditions.We
expect dramatically improved results in fiscal 1992. SPECIALTY CHANNELS
MgO'DONNELL-USEN FISHERIES CORPORATION J
is a sourcer of Atlantic cod and ocean perch,oper- CONAGRA FOODSERVICE COMPANIES offers
ating eight trawlers in the waters off Nova Scotia foodservice operators center-of-the-plate choices
and Prince Edward Island.Under the brand name in beef,frozen food and poultry under the brands
Taste O'Sea,O'Donnell-Usen processes and mar- Award,Armour,Banquet,Chun King, Healthy
kets more than 100 frozen seafood products,as Choice,Monfort and Morton. During fiscal 1991,
well as an extensive line of private label products. ConAgra Foodservice introduced a line of Healthy
The company also is a leading supplier of breaded Choice entrees for foodservice, and volume
cod portions to fast-food markets. exceeded expectations. ConAgra Foodservice also
O'Donnell-Usen Canada,the fishing and secured important new agreements to provide
initial processing business,had a strong year, value-added, further-processed poultry products
thanks in part to plant improvements and rising to leading quick-service restaurant chains and
cod prices. However, O'Donnell-Usen U.S.A., introduced a line of value-added beef products
the further-processing, retail and foodservice for club stores.
business,was hurt by the cod prices and by the In fiscal 1991, ConAgra Foodservice and
recession-related slowdown in seafood con- ConAgra Soviet Union developed and began oper-
sumption. Overall, O'Donnell-Usen earnings ating a frozen foodservice system for major hotels
decreased from the fiscal 1990 level. and embassies in Moscow.In Singapore,ConAgra
A fiscal 1991 consolidation of U.S. process- Foodservice developed a key breakfast product for
ing and administrative functions and a planned a major quick-service restaurant customer.
launch of new, relatively low-priced retail seafood In fiscal 1991, the success of new products
products should contribute to increased earnings and new distribution was more than offset by
in fiscal 1992. losses in the beef foodservice market stemming
TRIDENT SEAFOODS CORPORATION, 50-per-
cent owned by ConAgra,is a leader in the r
Northwest Pacific seafood industry.The compa- s'
ny sources,processes and markets crab, salmon,
herring and bottomfish—principally Pacific pol- I
lack,halibut and cod—for domestic and export — '� i.
markets.Trident operates one catcher processor
and six floating processors in the Bering Sea and , \ '
the North Pacific Ocean. � '
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from record-high beef prices, and results were better on the strengths of Lamb-Weston,we add
below expectations. In fiscal 1992, ConAgra strength in another important sales and distribu-
Foodservice will expand Healthy Choice into tion system—vending channels—and we gain a
other menu categories,and important new cus- stronger presence in the snack food market.
tomer agreements will be implemented. We Additionally, Golden Valley's acknowledged
expect improved results. leadership in microwave technology will enhance
ConAgra's product development efforts in
LAMB-WFSTON,INC.,a joint venture with many areas.
Golden Valley Microwave Foods,which merged
with ConAgra early in fiscal 1992, is a leading CONAGRA PET PRODUCTS COMPANY markets
processor of frozen potato products,primarily a complete line of pet accessories to consumers for
for foodservice markets. Lamb-Weston supplies the care and enjoyment of their pets. Principal
most of the leading restaurant chains and food- brands are Geisler and Sergeant's.
service distributors in the U.S. Products include Sales for fiscal year 1991 increased slightly,but IIII
traditional french fries as well as fries in unique marketing costs and lower margins caused earn-
shapes and flavored potato products.Annual ings to decline. ConAgra Pet Products plans
sales are about$500 million. increased sales and profit in fiscal 1992.
Lamb-Weston's margins were under pressure
in fiscal 1991 from increased production costs CoNAGRA CONSUMER DIRECT markets
resulting from a weather-related poor potato crop Pfaelzer Brothers steaks and Ace snacks directly
in the Washington State growing areas. Earnings to consumers via mail-order catalogs. Sales and
were still good, but were down from the strong earnings were disappointing in fiscal 1991. The
bulk of these companies'sales and earnings results
showing in fiscal 1990.We expect a good year in
fiscal 1992 as Lamb-Weston continues to achieve from business-to-business gifts during the holi-
day season. Recession fears and a generally poor
production efficiencies and to introduce new
business climate at that time had a negative
value-added potato produces.
effect on their performance during this critical
GOLDEN VALLEY MICROWAVE FOODS,INC. period. Substantial improvement in both sales
joined ConAgra early in fiscal 1992. Golden and earnings is expected in fiscal 1992.
Valley is a leader in the development of foods
primarily for preparation in microwave ovens. DYNO MERCHANDISE CORPORATION mar-
Products include popcorn, french fries, breakfast kets a full line of home sewing accessories under
foods and sandwiches distributed through the the brand name Singer for which Dyno is the
vending industry, mass merchandising outlets exclusive licensee in the United States and
and grocery stores. Golden Valley's sales were Canada. Dyno sales for fiscal 1991 were up sub-
about$172 million in calendar year 1990. stantially over the prior year,
The merger with and earnings reached record
Golden Valley is an impor- levels. Management Pfnel�el
cant strategic opportunity was strengthened during
the year, and we expect
for ConAgra. We expect Y P
to capitalize increased sales and earnings
again in fiscal 1992.
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BASIC FOOD COMPANIES:
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INTERNATIONAL
CONAGRA INTERNATIONAL trades agricultural ConAgra Wool Company(formerly the Elders
commodities and foodstuffs worldwide and oper- International Wool Division) was acquired late
ates food processing and distribution businesses in fiscal 1991. The company trades and processes
that are primarily outside the continental U.S. wool in Australia and is a leading exporter of
ConAgra International has trading offices in Australian wool. ConAgra Wool was profitable
23 nations,extensive merchandising facilities and for the short time it was part of ConAgra in
transportation assets in the United States, and fiscal 1991.
processing facilities in the U.S.,Asia,Australia, ConAgra Trading Companies' earnings
Canada, Europe and Latin America.Annual declined substantially during fiscal 1991,due
invoiced sales of ConAgra International are about largely to sizeable losses in the edible bean trad-
$7.5 billion,versus reported sales of about$1 ing business.The business has been restructured,
billion.This is because in many trading transac- and management has been strengthened;we
tions only gross margins, not invoiced sales, are expect the business to return to profitability in
included in reported sales. fiscal 1992. al
ConAgra International consists of both trading ConAgra Grain Companies performed well
companies and food processing and distribution in the face of a downturn in grain industry condi-
companies. ConAgra Trading Companies and tions. Grain merchandising earnings dropped
their primary trading products are ConAgra Grain from the fiscal 1990 record level. Fiscal 1992 will
Companies (grain), ConAgra Wool Company be another tough year if world grain trade remains
(Australian wool), Berger and Company(pulses, sluggish,and it will be a challenge for ConAgra
which are dry edible beans,peas and lentils), Grain to match their fiscal 1991 performance.
Camerican International(food products and Earnings were ahead of last year for
ingredients),Petrosul International Ltd. Camerican International, Petrosul International
(Canadian sulfur) and Woodward &Dickerson and Woodward&Dickerson. Camerican and
(industrial raw materials, bulk chemicals, Woodward expect another earnings increase in
machinery and wood products). fiscal 1992, but soft demand and lower sulfur
The largest trading company is ConAgra prices will make it difficult for Petrosul to match
Grain Companies, a family of grain merchandis- its fiscal 1991 results.
ing businesses.The largest U.S. business is Peavey The international food
Grain Company. Peavey's merchandising network processing and distribution
includes more than 100 interior and export ele- businesses are organized into
vators in 18 states. four regional operating
_— - Grain merchandis- companies: ConAgra Asia-
ing operations are Pacific, ConAgra Eastern
N"G Hoy" supported by Europe/Soviet Union,c. C
� ii
• about 1100 ConAgra Europe and s:,; _
•
D # barges, 20 line ConAgra Latin America. 0
A • haul boats and "ii p,
DAC 1 A more than 2000 f"
A •
rail cars. '
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CONAGRA ASIA-PACIFIC works with other leading European seafood distributor, and has a
ConAgra independent operating companies to majority interest in S.A.M.S., a distributor of
market and distribute their products to retail and processed meats and deli products.
foodservice customers in the Far East, and oper- During fiscal 1991, ConAgra acquired 20
ates food processing joint ventures in Australia percent and has an option to acquire another 30
and Thailand with local partners. percent of IDEA Industrie S.A.,a leading French
During fiscal 1991, ConAgra aquired a 50- meat processor and distributor which sells to the
percent interest in Elders Meat Division, called major retail chains in France. ConAgra acquired
Australia Meat Holdings (AMH),a leading 100 percent of Hyman Foods Limited,an
Australian beef processor and exporter.AMH is English company that processes and distributes
ConAgra's second meat processing joint venture frozen meat products.
in Australia. ConAgra Asia-Pacific was unprof- ConAgra Europe's earnings increased substan-
IIIIin fiscal 1991, but we expect substantially Bally in fiscal 1991.The poultry and processed
improved results in fiscal 1992. meat businesses in Portugal became profitable,and
the feed businesses in Spain and Portugal had
CONAGRA EASTERN EUROPE and CONAGRA record years.Gelazur and SA.M.S.performed well
SovIET UNION are working to grow ConAgra's despite difficult market conditions,but results in
presence in the rapidly changing economies in the poultry and meat businesses in Spain were
Eastern Europe and the Soviet Union. During fis- unsatisfactory. ConAgra Europe expects increased
cal 1991,ConAgra Soviet Union,working with earnings again in fiscal 1992.
ConAgra Foodservice Companies,began operat-
ing a frozen food distribution business in Moscow. CONAGRA LATIN AMERICA includes Puerto
Early in fiscal 1992, ConAgra Soviet Union Rico Basic Foods Company, a leader in food
signed a definitive agreement to form a 50-50 processing and distribution in Puerto Rico.The
joint venture with Chilewich Partners,called company produces and markets poultry prod-
Chilewich Group. Chilewich Group is a world- ucts, flour,processed corn products and formula
wide trader of agricultural commodities and food feed. Since the acquisition of Beatrice, Swift-
products. Chilewich brings to ConAgra a network Eckrich's distribution company and ConAgra
of experienced traders who are well-positioned to Latin America's have been merged to form one
develop countertrade opportunities with the frozen, refrigerated and dry grocery products dis-
Soviet Union central government and individual tribution company.
state enterprises and republics. New businesses Fiscal 1991 was another good year for
also are being developed in Hungary and other Puerto Rico Basic Foods.The company made
Eastern European countries. These investments meaningful progress in new product develop-
should begin to pay off in fiscal 1992, and we ment, and earnings were up slightly.We expect
expect ConAgra Eastern Europe/Soviet Union to an increase again in fiscal 1992.
become profitable. Overall, ConAgra International's fiscal 1991
operating profit was down significantly from fis-
CONAGRA EUROPE includes basic cal 1990 results.We expect a sharp earnings
food companies in Spain and Portugal rebound in fiscal 1992.
&A� � and food distribution businesses based
�� in France.In Spain,ConAgra owns
Saprogal, S.A.and Bioter,S.A.In —
Portugal,ConAgra has a majority interest
1' in Sapropor,SA.R.L.These companies
'� are involved in animal feed production, r6 GREEKo
;; hog breitmaPoeding,meat processing and broil- S " x $TV%
i- er chicken production. In France,
ConAgra owns half of Gelazur, S.A., a
ira todos los usos
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arena de Maiz -. �� c s, -
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GRAIN PROCESSING
CONAGRA FLOUR MILLING COMPANY is a milling and fiber businesses improved results sig-
leader in the U.S. flour milling industry with 28 nificantly but still operated below expectations.
mills in 15 states. ConAgra Flour Milling's cus- In fiscal 1992,we expect increased earnings
tomers are principally commercial bakeries and in flour milling, corn milling and the fiber busi-
pasta producers.Annual flour volume is about ness,a modest reduction in oat processing
70 million hundredweights, or seven billion earnings and good contributions from the new
pounds. Milling capacity is about 270,000 hun- businesses in Australia and Canada.
dredweights per day.
CONAGRA FEED INGREDIENT
CONAGRA SPECIALTY GRAIN PRODUCTS MERCHANDISING COMPANY merchandises ani-
COMPANY includes oat milling,dry corn milling mal feed ingredients to large feeders,wholesalers "The quality of semolina
and barley processing businesses.Annual oat and exporters.This company had another good flour determines the
processing capacity is about 3.8 million hundred- year, but earnings were down modestly from fis- quality of our pasta
weights,or 380 million pounds. Late in fiscal cal 1990's record level.We expect increased products.We needed a ill
1991, ConAgra Specialty Grain opened Westglen earnings in fiscal 1992. supplier we had confi-
Milling Ltd.,a joint venture oat and barley pro- dente in.ConAgra Flour
cessing mill in western Canada,and added Barrett UNITED SPECIALTY FOOD INGREDIENTS Milling Company has
Burston International Pry Ltd.,an Australian malt COMPANIES manufactures and markets a broad gone the distance to
company acquired in the Elders transaction. line of natural spices, blended seasonings, natural meet our needs by con-
company Burston processes barley into malt and flavors, spray-dried food ingredients, food oils, sistently delivering
lard and eggs. General Spice, in its first full year high-quality semolina-
sells it to the brewing industry in Australia and gS • P Y day in and day out."
worldwide. ConAgra Specialty Gra in also is Bevel- with ConAgra, successfully introduced natural
C.Mickey Skinner
oping grain-based fat replacement technology and meat-flavor gravies and soup bases and had an President,Hershey Pasta Group
applications with significant potential in many outstanding year. Other new products introduced
food industry sectors. by United Specialty Food Ingredients during fis-
cal 1991 include milk replacers and non-dairy,
CANADIAN HARVEST U.S.A.,a joint venture cholesterol-free soft-serve desserts. United
with Du Pont Company, manufactures and mar- Specialty Food Ingredients'fiscal 1991 earn-
kets a full line of fibers, including corn bran, ings were over plan and well above the fiscal 1
specialty oat fiber,white oat fiber and barley 1990 level.We expect increased earnings
fiber, for customers in the food industry. again in fiscal 1992 as this company continues
Canadian Harvest fibers are used primarily in to grow by helping its food industry cus-
low-calorie breads and high-fiber foods. tomers develop and manufacture
During fiscal 1991, U.S.domestic flour con- wholesome,appealing and nutri-
sumption increased slightly,with exports generally tious prepared foods. `
flat. Per capita consumption of oats grew at a Overall, ConAgra Grain Allr
slower pace than last year,but was still strong. Processing earnings were on >
ConAgra Flour Milling had a good year, plan and substantially ~T
with earnings well above the fiscal 1990 level. above fiscal 1990 earnings. ''
The oat processing business had a good year, but We expect another profit
earnings declined from fiscal 1990's strong increase in fiscal 1992.
results due to an expected decline in margins.
The Australian malt business made a contribu-
tion for the short time it was •
______---' part of ConAgra. The corn
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BASIC FOOD COMPANIES:
v
CROP PROTECTION CHEMICALS
UNITED AGM PRODUCTS (UAP) is the lead- and judicious use of crop protection chemicals.
ing distributor of crop protection chemicals to UAP also will continue to invest in Ecochem—a
North American markets,serving customers in new joint venture with major environmental
most major agricultural areas in the U.S. and implications,discussed later in this section.
Canada. UAP distributes a broad line of pesti- Fiscal 1992 began with increased demand
cider manufactured by major chemical for crop protection chemicals in some regions of
companies, and formulates and distributes its the U.S. Unusually wet conditions initially delayed
own products under the Clean Crop label. plantings and pesticide demand, then caused "Finding a crop proles-
Annual sales are about$1.3 billion. weed pressure on Midwestern corn and soybean tion chemical dealer
Three UAP companies—Hess &Clark acres and insect pressure in Southern cotton you can trust is top pri-
Company, Omaha Vaccine and Wholesale fields. For fiscal 1992 as a whole,we expect ority in a farming
Veterinary Supply—are national marketers of another increase in sales and earnings. business. I've been
animal health care products. working with UAP dealer
During fiscal 1991, industrywide sales of Ron Osborne for 23
( years.I can always
crop protection chemicals in the U.S. and _PERTILIZER & FEED count on Ron to be here
Canada were down. Despite relatively weak when I need him."
industry conditions and additional spending Bill Markham
related to significant new business investment, CONAGRA FERTILIZER COMPANY is a leading Berthoud,Colorado
UAP's sales and operating profit were modestly worldwide marketer of fertilizer products. Products winner ota 7991 OAP
ahead of fiscal 1990 levels. UAP's geographic are distributed in the United States via a system Environmental Excellence Award
balance and strong emphasis on customer service of strategically located warehouses that serve cus-
contributed to UAP's eighth straight year of tomers in the growing regions.Annual fertilizer
record results. volume exceeds four million tons.
UAP's seed business, begun during fiscal International fertilizer markets returned to a
1990, made steady progress during fiscal 1991. more normal supply-and-demand balance in late
Volumes improved,especially in the southern fiscal 1991,after the product shortages that
-
U.S.,and continued progress is expected. Early skewed markets late in fiscal 1990. The North
n UArs fiscal 1992, the Cropmate retail fertiliz- American fertilizer industry suffered from
er business was transferred from ConAgra an unusually wet spring in 1990 across
Fertilizer Company to UAP to strengthen service the Midwestern U.S., resulting in a com-
to retail customers. pressed fertilizer season and decreased volumes
UAP continued to promote environmental and margins.
education in an extensive marketing program tar-
geted to dealers and farmers.The"Environmental
Excellence"program is a multimedia fi
approach that covers such topics
as groundwater protection,safety
I '
DRY SOLUBLE HERBICIDE
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ConAgra Fertilizer's international business ConAgra Feed Company is continuing to
was well ahead of plan but earnings were below create new feed markets by developing new lines
the fiscal 1990 level that had benefited from of business. For example, an operation that con-
opportunities created by market imbalances.The tracts with farmers to grow feeder pigs to market
North American business operated below plan size will bee expanded during
should improve a fiscal
but well ahead of fiscal 1990.Blue Ribbon industry T
Energy,which markets propane, natural gas liq- little in
1992.
year.
Feed expects anoth-
uids and other energy-related products reasonably g Y
throughout the U.S.,had another outstanding NUTRIBASICS COMPANY manufactures and
year. Overall,ConAgra Fertilizer's fiscal 1991 markets nutrient additives for animal feeds.
earnings increased significantly over the fiscal NutriBasics had an excellent year, exceeding plan
1990 level. and achieving record sales and unit volumes.
Early in fiscal 1992, ConAgra Fertilizer Late in fiscal 1991,NutriBasics became a joint
IIIsold four U.S. ammonia terminals and trans- venture when Du Pont Company purchased 50
ferred its retail Cropmate fertilizer outlets to percent of the company.We expect fiscal 1992 to
United Agri Products. be another good year for NutriBasics.
Fiscal 1992 will be another challenging year
for ConAgra Fertilizer.Another wet spring com- DUCON,another ConAgra/Du Pont joint
pressed the 1991 fertilizer season in Midwestern venture, is a leading producer of choline chlo-
and some Southern regions of the U.S. Business ride, a B-complex vitamin added to animal feed.
should be helped some,however,by an expected DuCon also sells additives to the food and phar-
slight increase in U.S. planted acreage. ConAgra maceutical industries. DuCon had another good
Fertilizer expects a good increase in operating year, ahead of profit plans.
earnings in fiscal 1992.
ConAgra Fertilizer Company continues to (� RETAILING
tell the story of fertilizers' contributions to the (SPECIALTY i�G rf�LING
quality of life through increased quantity and
quality of food and fiber products. Emphasis
continues to be placed on stewardship of land CONAGRA RETAIL COMPANIES include 189
and water resources. full-line country stores and fabric and craft
stores, located principally in agricultural regions
CoNAGRA FEED COMPANY produces and
of the United States.
markets formula feeds for customers in the
southeastern United States. Principal brands are COUNTRY GENERAL STORES carry merchan-
Formax and Ponderosa. dise targeted for country living,including clothing,
ConAgra Feed's highest-volume product line boots and other footwear,housewares,lawn and
is commercial dairy feed, and continued compet- garden supplies, farm and ranch supplies, hard-
itive pressure in the dairy industry kept tonnage ware, animal care products and sporting goods.
slightly below the fiscal 1990 level.ConAgra Feed There are 91 stores in eight central states and
managed well in a tough environment, and earn- California operating under the names Country
ings were on plan and ahead of the previous year. General,Wheelers, S&S,Sandvig's and
—- Peavey Ranch and Home. Work began dur- -
' � � ing 1991 on an efficient new warehouse in
�`— .r.,--J„ ° 2� n Nebraska that will greatly improve inventory �,
�,, � t.`�r cl�� control and store replenishment systems
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and enhance growth opportunities for Country ConAgra is especially interested in potential
General. One store closed during the year. polylactide uses in the fast food industry and in
Country General had a good year,with sales grocery products packaging,in applications such
and earnings well ahead of the fiscal 1990 level. as insulated drink cups, insulated fast food con-
At least two new stores will open in fiscal 1992, tainers and frozen food packages.
and another good profit increase is expected. Ecochem also will market high-quality lactic
acid and derivative products to the food addi-
NORTHWEST FABRICS &CRAFTS stores are tives,preservatives,animal feed and lawn and
complete fabric and craft stores,with home garden fertilizer markets starting in the first half
sewing as the predominant department. There of fiscal 1993. Ecochem is currently constructing
are 98 stores in 17 states. Eleven new stores a$20 million lactic acid manufacturing facility
opened during fiscal 1991, including the first in Wisconsin.
southern U.S. store in Amarillo,Texas.Two Ecochem's natural lactic acid technologyIIII
stores were closed during the year. originated with developments by United Agri
Northwest Fabrics&Crafts continues to see Products and the University of Wisconsin.At
good results from their mix of fabrics and craft the close of fiscal 1991, Ecochem had filed more
supplies, and customer response to the 11 new than 20 patent applications covering key prod-
stores was excellent.The company opened a larger uct areas and proprietary low-cost processes
and more efficient warehouse and distribution required to produce the polylactides.A polylac-
center in Charlotte, North Carolina,and plans to tide pilot plant is scheduled for start-up in fiscal
move its headquarters to Charlotte in fiscal 1992. 1992, and a world-scale commercial plant is tar-
Northwest Fabrics &Crafts had another geted to be on line in fiscal 1995.
excellent year,with sales and earnings signifi- Ecochem is developing versatile, socially
cantly ahead of plan and fiscal 1990.At least responsible materials based on renewable natural
seven new stores will open in fiscal 1992,and resources and biotechnology.The company has
another good earnings increase is planned. the potential to generate significant revenues
Overall, ConAgra Retail Companies had a and earnings after calendar year 1994 if current
good year,with sales up and earnings significant- expectations are fulfilled.We expect Ecochem's
ly ahead of fiscal 1990.We expect sales and polylactides to have a major impact in the future
earnings to increase again in fiscal 1992. on the food industry and other industries.
ECOCHEM ECOCHEM: SUPPORTING SUSTAINABLE GROWTH
Using renewable resources for new materials
ECOLOGICAL CHEMICAL PRODUCTS
COMPANY(ECOCHEM) is a ConAgra/Du Pont Ponatiogok mut
joint venture formed during fiscal 1991. Ecochem + Prati
is developing and expects to market polylactides M"'R"Mu
polymers made from lactic acid that in labo-
ratorytests exhibit controlled degradability and a u or "•"
should enable the recycling of some paper prod- ADDITIVES A[MAIZE F•„ 'E
— ri nr
:0 n -.ACA ILII
ucts in ways not done today. Commercial CO2 , " � ��'
quantities of the new material are projected i F,, Ili LII
to be available in fiscal 1995. DEGRADES INTO !' 1 :1
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I'INANCE COMPANIES
HIGHLIGHTS
In millions
1991 1990
Sales $153.6 $180.1
Operating profit 13.1 15.9
Invested capital at year beginning 116.4 108.2
ConAgra's Finance Companies are reported separately because of their different financial character-
istics.These companies are self-financed,with no parent company guarantees to support borrowings.
IS Operating profit in our Finance Companies decreased 18 percent in fiscal 1991. Earnings were up
in Monfort Finance Company, but down in the Geldermann futures brokerage business due to an
industry-related volume slowdown.
We expect increased earnings for the Finance Companies in fiscal 1992.
GELDERMANN,INC.,a leading U.S. futures Fiscal 1991 was a difficult year for the
brokerage firm,serves customers internationally futures industry,with the economic slowdown
through more than 100 branches and affiliated causing fall-offs in futures trading activities
brokerage offices.ConAgra does not guarantee and general woes for financial industries.
"I've been dealing with any obligations of Geldermann.Through its Geldermann managed well and had a profit-
Geldermann for a long frill-service securities subsidiary,Geldermann able year, but earnings were down from
time,and the reason is Securities, Inc.,the company is able to offer execu- fiscal 1990. We expect improved results in
simple: they have a tion and clearing services for professional traders fiscal 1992.
good feel for the mar- on all U.S.exchanges,focusing on options-
net,they generate good MONFORT FINANCE COMPANY is a self-
trading ideas and they driven products.Geldermann's Heinold Asset
Management,Inc.subsidiary is a leadin corn- financed subsidiary which provides short-term
have good execution." a} g financing, typically four to five months, rtmari-
Charles Piermarini modity fund general partner, managing 28 public g t3 P Y P
Vice President,Money and commodity futures funds,including one offshore. ly for cattle in ConAgra Red Meat Companies'
Capital Markets Geldermann has continued to aggressively feedlots. Monfort Finance Company's debt is
Household International pursue institutional clientele for foreign not guaranteed by ConAgra. This business
exchange and bullion trading business and to lay finances cattle it owns and will sell to ConAgra
the groundwork for expanding its customer base Red Meat Companies for processing. It also
in Pacific Rim countries. Business relation- finances cattle owned by third parties while
these cattle are on feed in ConAgra Red Meat
ships with Asian customers increased this
past year,as the company built its reputa- Companies' feedlots.
tion through sales and training seminars Monfort Finance also includes Weld
and meetings. Through offices in Agricultural Credit, Inc., a small truck financing
,f' London, Rotterdam and Brussels, company, and Weld Insurance Company, Inc.,
a small captive insurance subsidiary.
f� Geldermann is establishing a P rY
1 / , stronger foothold in Monfort Finance Company had a good
European markets as well. year,with earnings ahead of the fiscal 1990 level.
t' i` Fiscal 1992 should be another good year.
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Clq4ANAGEMENT DISCUSSION & ANALYSIS
In millions
1991 1990 1989
Sales $19,504.7 $15,501.2 $11,340.4
Operating profit 870.2 549.8 468.3
Invested capital
Year beginning 1,836.7 1,626.7 1,392.1
Year end 5,332.9 1,836.7 1,626.7
INTRODUCTION
In this part of the business review we discuss ConAgra's financial condition and overall operating
results.
This discussion relates to information contained in other sections of this annual report, including
the financial statements and notes to the financial statements. The financial statements are presented
in three formats: Basic Food Companies, Finance Companies and Consolidated. Unless otherwise
indicated, this discussion pertains to ConAgra's Consolidated financial condition and operations.
FINANCIAL CONDITION
Capital Resources
ConAgra's earnings are generated principally by its capital investment. Capital investment con-
sists of working capital (current assets less current liabilities) plus all noncurrent assets.This capital
investment is financed with stockholders' equity, long-term debt and other noncurrent liabilities.
CAPITAL INVESTMENT
Dollars in millions
% Increase
1991 1990 (Decrease)
Working capital $ 255.5 $ 380.2 (32.8)%
Property,plant&equipment 1,941.5 1,034.7 87.6
Intangible assets 2,720.9 253.5 973.3
Other noncurrent assets 415.0 168.3 146.6
Total noncurrent assets 5,077.4 1,456.5 248.6
Capital investment $5,332.9 $1,836.7 190.4
During fiscal 1991,capital investment nearly tripled to$5.3 billion from$1.8 billion. Working
capital declined 33 percent to$255.5 million from $380.2 million,while noncurrent assets grew 249
percent to$5.1 billion from$1.5 billion after depreciation and amortization of$250.8 million in fis-
cal 1991. ConAgra's acquisition of Beatrice Company on August 14, 1990 was the primary factor in
the changes in capital investment components.
Within noncurrent assets, the Beatrice transaction added to intangible assets approximately$2.5
billion in goodwill at the time of acquisition. The goodwill represents valuable assets such as respected
brands with significant marketplace acceptance. Over time, these assets are amortized and decline
from an accounting standpoint,while their real economic value should appreciate if they continue to
be managed well.Their amortization timeframe is lengthy, typically 40 years,so the negative effect on
reported annual earnings is not substantial.Also, amortization is a non-cash charge which increases
the effective tax rate but does not penalize cash flow.
The Beatrice transaction also added approximately$765 million to noncurrent assets in property,
plant and equipment at the time of the transaction. Moreover, during fiscal 1991 ConAgra invested
$331.8 million in additions to property, plant and equipment of ongoing businesses, an increase of 69
percent versus $196.3 million in fiscal 1990.
Internally generated cash flow is the primary source of ConAgra's capital investment growth over
the long term. In fiscal 1991, cash flow from net income, depreciation and amortization totaled $562
million, an increase of 56 percent from $361.4 million in fiscal 1990. Free cash flow(net income plus
depreciation and amortization minus dividends) grew 59 percent to$462.7 million in fiscal 1991
from $291.6 million in fiscal 1990. Including all cash flows from operating, investing and financing
activities, ConAgra's cash and cash equivalents increased$595.2 million to $715.7 million at the end
of fiscal 1991.
In fiscal 1992, ConAgra plans to invest approximately$310 million in additions to property,
plant and equipment of present businesses. Cash flow from depreciation and amortization of approxi-
mately$295 million plus net income is expected to be sufficient for this investment and dividend
requirements,with a surplus for other potential uses.
ConAgra financed the fiscal 1991 increase in capital investment as shown in the"Capitalization"
table.
CAPITALIZATION
Dollars in millions
1991 1990 %Increase
Senior long-term debt $1,663.0 $ 605.4 174.7%
Other noncurrent liabilities 1,066.4 103.3 932.3
Subordinated long-term debt 430.0 30.0 NM
Preferred stockholders'equity 356.1 2.2 NM
Common stockholders'equity 1,817.4 1,095.8 65.9
Total capitalization $5,332.9 $1,836.7 190.4
NM=Not Meamoglul
During fiscal 1991, ConAgra arranged $1.2 billion of new long-term financing as part of a
financing plan established in conjunction with the acquisition of Beatrice Company. This financing
was accomplished on terms more favorable than the original plan.
ConAgra completed two public offerings of senior notes: 7-year, $300 million, 9.75 percent, and
15-year, $100 million, 9.875 percent. ConAgra also completed a public offering of 30-year subordi-
nated notes for$400 million at 9.75 percent. Proceeds of these issues were used primarily to help
finance the Beatrice acquisition and replace expensive Beatrice debt. For example, the replacement of
two issues of Beatrice debt of$251 million due in 1997 with interest at about 13 percent will reduce
interest expense by more than $50 million over seven years.
ConAgra also completed agreements to sell, for up to five years, undivided participation interests
in designated receivables not to exceed $400 million. Proceeds of approximately$379 million, net of
discount and fees,were used to reduce debt on the company's balance sheet.
The other noncurrent liabilities added during fiscal 1991 consist principally of estimated liabilities
and reserves of Beatrice Company for income taxes and interest thereon, post-retirement health care,
INVESTED CAPITAL pensions and various litigation, environmental and other matters. It will require many years for issues
5,333 relating to these liabilities to be resolved. Resolution over time will use cash, but will not affect earn-
ings if the reserves are appropriate.
$mtutonr Preferred stockholders' equity increased due to $354.9 million of preferred stock issued in the
Beatrice acquisition. The principal sources of the increase in common stockholders' equity were 11.1
million common shares valued at$354.9 million issued in the Beatrice acquisition, a public offering
of 4.4 million common shares with proceeds of$144 million used primarily for the Elders acquisition
(see Note 2 on page 51), and net income.
Financing Objective
ConAgra's primary financing objective is to maintain a conservative balance sheet. Equity, long-
term debt and other noncurrent liabilities are used to finance noncurrent assets and permanent
1,837 working capital needs. Short-term debt is used to finance liquid and seasonal asset requirements.
1'827 As of fiscal 1990, ConAgra's long-term debt objective for the Basic Food Companies was that
1,297 1.392
long-term debt normally would not exceed 35 percent of total capitalization. ConAgra met its long-
term debt objective every year from 1976,when it was established, through 1990.
'90
ConAgra's policy has long been that we would temporarily exceed our self-imposed capitalization
ratio objective for a major strategic acquisition that benefits stockholders'long-term interests. In man-
agement's view, Beatrice Company was such an opportunity.As reviewed in this report a year ago,we
intentionally exceeded our long-term debt objective in fiscal 1991 to acquire Beatrice.
The Beatrice acquisition and our associated financing plan prompted us to evaluate and adjust our
long-term debt objective. For fiscal 1991 and subsequent years, our objective for the Basic Food
Companies is that senior long-term debt normally will not exceed 30 percent of total long-term debt
plus equity. Subordinated long-term debt is excluded from the numerator and included in the denomi-
nator because it provides an additional layer of financial protection to both short-term and long-term
senior lenders for a long time—30 years in the case of our$400 million subordinated debt issue. This
far exceeds the final maturity of all other long-term debt; its preference over common stock and its cash
flow characteristics are similar to preferred stock,while the interest expense is tax-deductible.
At the end of fiscal 1991, ConAgra's Basic Food Companies' senior long-term debt was 40 percent
of long-term debt plus equity. We plan to reach the 30-percent objective within the next few years.
ConAgra's short-term debt objective for the Basic Food Companies is to eliminate year-end net short-
term debt(short-term debt less cash) used to finance assets other than hedged commodity inventories.
Hedged commodity inventories include, for example,grain hedged in futures markets or by firm forward
sales contracts. ConAgra met its short-term debt objective in fiscal 1991 and every year since an objective
was established in 1976.
At the end of fiscal 1991, Basic Food Companies' cash and hedged commodity inventories totaled
$1.19 billion,while short-term debt was zero. Current installments of long-term debt were$538 mil-
lion,an unusually high amount as a result of Beatrice pre-acquisition debt. However, this one-time
high amount was exceeded by$666 million in cash. Current installments of long-term debt will drop
to a more normal level of approximately$90 million by the end of fiscal 1992.
The Finance Companies'debt is not guaranteed by ConAgra.They had long-term debt of$30
million at the end of fiscal years 1991 and 1990. Short-term debt of$257 million at the end of fiscal
1991 and $198 million at the end of fiscal 1990 financed assets such as cattle on feed, notes receivable
and open customer transactions.
ConAgra relies primarily on the sale of commercial paper to provide short-term financing,
although the company also borrows from commercial banks. Commercial paper borrowings are
backed by bank credit facilities. During fiscal 1991, short-term borrowing continued at interest rates
below prime. Short-term indebtedness averaged$1.27 billion in fiscal 1991,while the highest period-
end level was $2.17 billion, compared to $1.33 billion and$1.74 billion, respectively, in fiscal 1990.
ConAgra uses operating leases primarily for transportation equipment and selected facilities. In fis-
cal 1991, the company's non-cancelable operating lease rentals were$110 million compared to $81
million in fiscal 1990. Earnings before tax, rent or interest on long-term debt covered non-cancelable
rent plus interest on long-term debt by a factor of 2.6 times in fiscal 1991 and 3.4 times in fiscal 1990.
To maintain a conservative financial position,ConAgra focuses on cash flow as well as our balance
sheet. We develop plans so that cash flow will be sufficient to meet financing obligations,maintain plant
and equipment and pay stockholder dividends even if a severe and unexpected decline in earnings occurs.
In our view,this approach provides meaningful assurance that leverage does not become excessive.
Asset Liquidity
Many of ConAgra's businesses are current asset intensive.At the end of fiscal 1991, inventory and
accounts receivable were 1.7 times property,plant and equipment. Substantial portions of ConAgra's
inventories such as grain,flour and major feed ingredients are fungible.These inventories are hedged to
the extent practicable to protect inventory value against major price fluctuations.
ConAgra's reported net sales understate the degree to which current assets turn over during the
year. For fiscal 1991, total sales invoiced to customers were approximately$26 billion versus $19.5 bil-
lion net sales. This is because grain and feed ingredient merchandising transactions include only gross
margins in reported sales.
During fiscal 1991, current assets increased 30 percent to $4.34 billion,while current liabilities
increased 38 percent to $4.09 billion. These increases were caused primarily by the addition of
Beatrice's businesses.
ConAgra's current ratio (current assets divided by current liabilities)was 1.06 to 1 at the end of fis-
cal 1991 and 1.13 to 1 at the end of fiscal 1990. ConAgra's low current ratio is a composite of various
current ratios appropriate for our individual businesses. They participate in different sectors of the food
industry. For example, in our Agri-Products segment,where trade payables commonly finance most
current assets of crop protection chemical and fertilizer distribution businesses, a current ratio of about
1 to 1 would be appropriate. Businesses in ConAgra's"Trading&Processing segment typically have
highly liquid, hedged inventories. Consequently,a current ratio near 1 to 1 also is sound. In ConAgra's
Prepared Foods segment,fresh beef, pork and Iamb businesses quickly convert purchased raw materials
to marketed products, turning over inventories very rapidly. On the other hand, some Prepared Foods
businesses are more typical of a manufacturing industry where a current ratio of 1.5 or greater would
be expected.
OPERATING RESULTS
ConAgra's management considers return on common stockholders'equity the single most signifi-
cant measure of operating performance. The company's objective is to average in excess of a 20-percent
after-tax return on year-beginning common stockholders'equity and earn in excess of a 15-percent return
in any given year.The return was 20.2 percent in fiscal 1991,including a pro rata share($348.1 million)
of the common equity used to acquire Beatrice and the public offering of common stock.The return has
averaged 22.8 percent over the last five years.See pages 4 and 5 of this report for a full review of ConAgra's
financial objectives and results.
Through the"Changes in Earnings Components" table and the discussion that follows, ConAgra's
total operating results for the most recent fiscal years are reviewed in terms of changes in the compo-
nents of earnings. Operating results by ConAgra's industry segments were discussed in considerable
detail in earlier pages of this report.
Fiscal 1991 Compared to 1990
The results of Beatrice Company's businesses (Hunt-Wesson, Swift-Eckrich and Beatrice Cheese)
were included in ConAgra's results starting with the last two weeks of fiscal 1991's first quarter. These
businesses accounted for approximately three-fourths of the $4 billion sales increase in fiscal 1991.
Other sources of the sales increase included ConAgra Red Meat, ConAgra Frozen Foods and United
Agri Products, principally due to unit volume growth. Sales declined in the Trading& Processing
businesses due to lower grain and edible bean unit volumes and lower processed grain selling prices as
reduced ingredient costs were passed through to customers. Revenues decreased in ConAgra Finance
Companies due to lower Geldermann volumes.
The increases in cost of goods sold and selling, administrative and general expense were associated
mainly with the sales increase. Gross margin (net sales minus cost of goods sold) increased 55 percent
mainly due to added gross margin from the Beatrice businesses plus higher gross margin contributions
from ConAgra Frozen Foods, ConAgra Grain Processing, United Agri Products,ConAgra Red Meat and
ConAgra Retail. Some businesses, particularly ConAgra Poultry and Berger, had lower gross margins in
fiscal 1991.The largest sources of the increase in selling,administrative and general expense were the
Beatrice businesses, ConAgra Frozen Foods, ConAgra Grain Processing and United Agri Products.
Gross margin as a percent of net sales increased from 10.7 percent in fiscal 1990 to 13.2 percent
NET SALES in fiscal 1991. Selling, administrative and general expense as a percent of net sales increased from 7.4
percent to 9.1 percent. This shift was caused mainly by the addition of Beatrice and ConAgra Frozen
19,505 Foods'growth.These businesses have higher relative margins and marketing expense.
8 m7[[do„s Net interest expense increased mainly due to the addition of Beatrice's long-term debt and financ-
ing of the cash portion of the acquisition price.
Pretax earnings increased as a consequence of Hunt-Wesson's and Swift-Eckrich's contribution and
15,501 earnings growth in ConAgra Grain Processing, ConAgra Red Meats, ConAgra Frozen Foods,Armour,
ConAgra Fertilizer and other businesses. The contribution of unconsolidated subsidiaries to pretax
earnings increased 30 percent to $23.6 million from $18.1 million as Trident and ConAgra Europe
earnings gains more than compensated for a Lamb-Weston decrease. These increases were partially off-
11,340 set by lower pretax earnings in ConAgra Poultry, Berger and, to a lesser extent, other businesses.
On a percentage change basis, income taxes exceeded pretax earnings, and net income trailed pre-
9,668
9,144 tax earnings, due to a higher effective tax rate—39.6 percent in fiscal 1991 versus 35.1 percent in fiscal
1990. This was principally because Beatrice-related goodwill expense is non-deductible for income
tax purposes.
Income per share increased less than net income because weighted average shares outstanding
increased 11.1 percent mostly due to common shares used for acquisitions and higher preferred
90 91 dividends as a result of the preferred stock issued in the Beatrice acquisition. The difference between
the increases in operating income per share and net income per share is related to the fiscal 1990
nonrecurring gain described below. Excluding the fiscal 1990 nonrecurring gain, fiscal 1991 pretax
earnings increased 46.8 percent, and net income increased 35.5 percent.
Fiscal 1990 Compared to 1989
The major source of ConAgra's fiscal 1990 sales increase was the consolidation of SIPCO. No
SIPCO sales were included in ConAgra's results during fiscal 1989 when ConAgra owned 50 percent
of the business. ConAgra acquired the remaining 50 percent of SIPCO effective the beginning of fiscal
1990, and all SIPCO sales—more than $3 billion— were included in fiscal 1990 results. Other signif-
icant sources of the fiscal 1990 sales increase included Monfort, ConAgra Frozen Foods, United Agri
Products and ConAgra Fresh Meats, all mainly due to higher unit volumes.
The increases in cost of goods sold and selling, administrative and general expense were related
principally to the sales increase. The largest gains in gross margin were achieved by Monfort including
SIPCO, ConAgra Frozen Foods, United Agri Products, ConAgra Pet Products, ConAgra Foodservice,
Cook Family Foods and ConAgra Retail.Their gains were partially offset by lower gross margins in busi-
nesses including Armour Food,E.A. Miller, ConAgra Grain Processing, ConAgra Poultry and Berger.
The largest sources of the increase in selling, administrative and general expenses were Monfort
including SIPCO, ConAgra Frozen Foods, United Agri Products, ConAgra Pet Products andII
ConAgra Grain Processing. These increases were partially offset by declines in other businesses.
Gross margin and selling, administrative and general expense as a percent of net sales declined
mainly because of the addition of SIPCO's business which has lower relative margins and marketing
expense. The addition of SIPCO also was the principal source of higher interest expense.
The gain in pretax earnings had multiple, balanced sources, notably Monfort including SIPCO,
Camerican, ConAgra Frozen Foods, ConAgra Europe, Iamb-Weston, ConAgra Foodservice,
O'Donnell-Usen, United Agri Products and ConAgra Finance Companies. Increases in these and
other businesses were partially offset by decreases in some businesses including ConAgra Poultry,
ConAgra Grain Processing,Armour Food, Berger,Trident Seafoods and ConAgra Fertilizer.
Equity in earnings of unconsolidated subsidiaries was$18.1 million in fiscal 1990 versus a loss of
$37,000 in fiscal 1989 as substantially higher contributions from ConAgra Europe and Iamb-Weston
more than offset a decline in Trident Seafoods' results.
The upward swing in equity earnings also was the major cause of a lower effective tax rate, 35.1
percent in fiscal 1990 versus 36.6 percent in fiscal 1989, and a larger percentage increase in reported
net income than reported pretax income. Most taxes on equity earnings are provided for before these
earnings are included in ConAgra's income before income taxes.
Income per share increased less than net income because weighted average shares outstanding
increased 2.2 percent, principally due to common shares used for acquisitions and the conversion of
preferred stock to common stock.
Fiscal 1990 results include two nonrecurring items. They were a$26.9 million after-tax gain from
settlement of litigation related to Holly Farms Corporation and a$24.8 million after-tax provision for
realigning processed meats operations. The net gain from these items was$6 million before tax and
$2.1 million after tax or two cents per share.
CHANGES IN EARNINGS COMPONENTS
Dollars in millions except per share amounts
FISCAL 1991 vs.1990 FISCAL 1990 vs.1989
$Increase %Increase $Increase %Increase �T INCOMF
Net sales $4,003.5 25.8% $4,160.8 36.7% 3112
Cost of goods sold 3,085.7 22.3 3,972.6 40.2
Selling,administrative i m+rrr,,,,r
and general expense 631.6 54.9 129.3 12.6
231.7
Interest expense,net 127.4 74.7 38.3 28.9
Income before income taxes 158.3 44.4 44.7 14.3 ,97.9
Income taxes 78.8 62.9 10.9 9.6
Net income 79.5 34.3 33.8 17.1 1148.7 15a7
Income per share
Net income $ 26 13.9 $ 24 14.7
Excluding nonrecurring items $ .28 15.1 $ .22 13.5
90
ELEVEN-YEAR RESULTS
Six-year results,shown first,include restatements in prior years.*
Dollars in muttons except per share amounts Eleven-year results are shown as actually reported in all years.
Fiscal Year 1991 1990 1989
FOR THE YEAR(Restated)
Net sales $19,504.7 $15,501.2 $11,340.4
Income from continuing operations 311.2 231.7 197.9
Earnings per common and common equivalent share—
continuing operations $2.13 $1.87 $1.63
Cash dividends declared per share of common stock $.668 $.578 $.497
AT YEAR END (Restated)
lli Total assets $9,420.3 $4,804.2 $4,278.2
Senior long-term debt (noncurrent) 1,663.0 605.4 530.1
Subordinated long-term debt (noncurrent) 430.0 30.0 30.0
Redeemable preferred stock 356.1 2.2 8.7
Fiscal Year 1991 1990 1989
FOR THE YEAR(As actually reported)
Net sales $19,504.7 $15,501.2 $11,340.4
Equity in earnings (loss) of unconsolidated subsidiaries 23.6 18.1 —
Income from continuing operations before income taxes 515.2 356.9 312.2
After-tax income from continuing operations 311.2 231.7 197.9
Net income 311.2 231.7 197.9
Earnings per common and common equivalent share
Continuing operations $2.13 $1.87 $1.63
Net income $2.13 $1.87 $1.63
Cash dividends declared per share of common stock $.668 $.578 $.497
Market price per share of common stock
High $48.75 $31.88 $23.83
Low $29.50 $21.17 $18.00
Last $45.50 $30.75 $22.83
Weighted average number of common and common
equivalent shares outstanding(in millions) 136.9 123.2 120.6
Additions to property,plant and equipment, including
acquisitions $1,159.9 $349.3 $241.1
Depreciation and amortization 250.8 129.7 101.7
AT YEAR END (As actually reported)
Total assets $9,420.3 $4,804.2 $4,278.2
Current assets 4,342.9 3,347.7 3,160.4
Current liabilities 4,087.4 2,967.5 2,651.5
Working capital 255.5 380.2 508.9
Property, plant and equipment, net 1,941.5 1,034.7 825.5
Capital investment 5,332.9 1,836.7 1,626.7
Senior long-term debt(noncurrent) 1,663.0 605.4 530.1
Subordinated long-term debt(noncurrent) 430.0 30.0 30.0
Redeemable preferred stock 356.1 2.2 8.7 -
Common stockholders' equity 1,817.4 1,095.8 949.5
Stockholders' equity(all classes) 2,173.5 1,098.0 958.2
Common stockholders' equity per share $13.01 $8.93 $7.87
*In the six-year table:
Fiscal 1986 was restated in fiscal 1987 to reflect two fiscal 1987 mergers accounted for on a pooling-of-interests basis.
Fiscal years 1986 through 1988 were restated in fiscal 1989 to reflect the required consolidation of ConAgra's Finance Companies.
Year-end numbers for fiscal years 1986 through 1988 were restated in fiscal 1989 to reflect a change in ConAgra Fertilizer Company's
fiscal year end.
1988 A8/ 1986
$9,608.2 $9,143.5 $7,919.7
154.7 148.7 135.3
$1.29 $1.23 $1.12
$.432 $.373 $.323
$3,745.3 $2,939.0 $2,469.0
454.9 428.7 330.8al
30.0 60.7 70.0
9.6 13.3 14.2
1988 1987 1986 1985 1984 1983 1982 1981
$9,475.0 $9,001.6 $5,911.0 $5,498.2 $3,301.5 $2,308.9 $1,709.6 $1,381.7
10.5 2.8 3.1 1.9 18.1 4.9 (1.2) .3
240.1 271.5 180.3 151.6 89.7 79.7 52.2 38.2
154.7 148.7 105.3 91.7 65.2 50.4 32.9 27.1
154.7 148.7 105.3 91.7 62.6 47.8 32.9 27.1
$1.29 $1.23 $1.02 $.89 $.69 $.61 $.56 $.49
$1.29 $1.23 $1.02 $.89 $.66 $.57 $.56 $.49
$.432 $.373 $.323 $.281 $.246 $.215 $.185 $.162
$25.33 $22.67 $18.71 $11.46 $8.14 $7.19 $5.55 $5.17
$13.92 $16.54 $11.33 $ 7.56 $5.72 $3.78 $3.55 $1.89
$18.50 $17.83 $18.59 $11.33 $7.83 $5.86 $4.81 $4.31
118.8 119.3 101.8 101.3 91.8 79.7 58.2 54.3
$196.3 $178.3 $112.4 $97.5 $140.3 $199.0 $30.3 $35.9
89.5 77.4 53.6 45.9 34.0 24.1 14.3 12.3
$3,042.9 $2,482.5 $1,819.7 $1,547.1 $1,304.9 $901.5 $488.6 $500.2
2,076.2 1,707.1 1,283.5 1,062.9 840.9 593.3 345.5 370.7
1,636.1 1,236.6 926.2 755.3 619.0 390.0 222.6 275.9
440.1 470.5 357.3 307.6 222.0 203.3 122.9 94.8
696.1 601.9 427.1 373.8 331.2 253.2 122.9 108.5
1,406.8 1,245.9 893.5 791.9 685.9 511.5 266.0 224.4
489.9 428.7 309.0 261.9 237.7 203.4 96.8 89.4
9.6 13.3 14.2 23.6 30.3 26.5 8.2 8.7
814.4 722.5 510.5 458.3 405.5 273.3 156.5 123.3
•
824.0 735.8 524.8 481.8 435.8 299.8 164.7 132.0
$6.96 $6.17 $5.14 $4.61 $4.08 $3.30 $2.65 $2.23
Per share results reflect the following common stock splits: three-for-two in 1979,two-for-one in 1980, three-for-rwo in 1984,
two-for-one in 1986 and three-for-two in 1989.
CORPORATE CITIZENSHIP
As a corporate citizen, ConAgra gives financial support to a long list of organizations for
educational,civic, cultural, health and human service programs in our communities. Our policy is to
contribute in cash the equivalent of one percent of pretax earnings, over time, to such programs.
In addition to cash donations, ConAgra consistently makes substantial in-kind donations of
products,equipment and facilities. Our objective is to put our contributions to work where they will
be most effective in improving the quality of life in our communities.
"With funding from Hunt-Wesson,we can provide a "Our partnership with ConAgra is a model partnership
much-needed computer-assisted tutoring program for between the arts and a corporation. It benefits
kids who normally couldn't afford year-round tutoring." everyone involved."
Merlyn Race Carolyn Rutherford
III Executive Director Managing Director
Rays B Girls Club Nebraska Theatre Caravan
Fullerton, California
Hunt-Wesson provided funds The Nebraska Theatre
for the Boys e-Girls Club of Caravan is the professional
Pullerton, California to touring wing of the Omaha
purchase new computer Community Playhouse. Since
equipment and other teaching 1988, ConAgra has supported
aids for its computer-assisted the Caravan's annual tour,
tutoring program. In the which brings top-quality
photo, instructor Beth performances and theatre
Jahncke works with a group workshops to more than 20
of club members. Nebraska communities. The
photo is a scene from the
Caravan's/990-91
production of"Alice...A
Curious Adventure,"which
ConAgra sponsored on .<
tour and in a free
performance in Omaha far -
law-income families tatIrs ,
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We are especially proud of the personal community involvement of thousands of ConAgrans who
give generously of their time, talents and money. Our people play leadership roles in making hundreds
of communities better places to live and work.
This year,we highlight five of the many innovative ways that the financial support of ConAgra and
our independent operating companies—and the imagination and commitment of ConAgra people—
have made a difference.
"When starting a child-care facility in a rural area, it's "If it weren't for ConAgra's sponsorship,there
hard to make ends meet. Butterball Foods' wouldn't be a Scouting for Food drive in the fall.The
commitment to this facility allows us to have a drive is critical for the Food Bank because food
consistent program." donations are sparse during the summer."
Hattie Marlin Chuck RallenspergerMI
Executive Director, Executive Director
Northwest Arkansas Omaha Food Bank
Child Care,Inc.and Head Start
The Butterball Foods plant in ConAgra is the primary Gary Todd, FFA member
Huntsville,Arkansas teamed sponsor of Mid-America Boy and University of Nebraska-
with Arkansas child care Scout Council's annual Lincoln(UNL)agribusiness
expert Hallie Martin(in Scouting for Food drive, major, was one of the first
photo)to build a day-care which collects over 300,000 FFA students to win a four-
center for the children of plant cans and packages of food for year ConAgra-sponsored
employees and others in the food banks in Nebraska and scholarship to study
community.Butterball Iowa. In the photo, Omaha agribusiness at UNL
donated the land adjacent to Food Bank Executive Director ConAgra helped initiate the
its plant for the building, Chuck Raffensperger is shown agribusiness degree program
helped fund construction and with two scouts who worked in 1981 to produce graduates
committed to fill half the on the drive. better prepared for jobs in
center's openings. Paul's agribusiness and since 1987,
Place-Madison County Child 7' -� has awarded scholarships to
Care Center is named for mv. the program. Todd a
Butterball plant manager senior,also was named the
Paul Prudhomme. 1989 FFA Outstanding
i Agri-science Student for his
i, 4'.% projects that help farmers cut
._ ° s• 7A ir
production cosh and protect
the envtronment.
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PRINCIPAL, OFFICERS
CHARLES M.HARPER,63
Chairman and Chief Executive Officer
CEO since 1976,chairman since 1981.Joined
ConAgra as chief operating officer in 1974 after 20
years with The Pillsbury Company,where his . a-
'.
responsibilities at various times included the _ t
poultry and foodservice businesses,several venture `
companies,research,product and process IIf1 'development,and engineering.Also previouslyNFassociated with General Motors.
PHILIP B.FLETCHER,58
President and Chief Operating Officer 1
Named president and chief operating officer
of ConAgra in 1989;named to the Office of the
President in 1984.Joined ConAgra in 1982 as
spresident of Banquet Foods Company.Thirty- .
three years of food industry experience;formerly
associated with Heublein Company,H.J.Heinz,
U.S.A.and Campbell Soup Company. tl
OFFICE OF THE PRESIDENT
ALBERT J.CROSSON,60
President and Chief Operating Officer,
Hunt-Wesson,Inc. Office of the President,standing from left to right: Floyd McKinnerney Lee Lochmann,
Named to the Office of the President in Truck Morrison, George Hae er,Dick Monfort,Al Crosson,Jim Tindall
November 1990.Joined ConAgra in August Inset: Jim Watkins f
1990 when ConAgra acquired Beatrice
Company.President of Beatrice/Hunt-Wesson,
Inc. 1986-1990.Thirty-four years of food T TRUXTUN MORRISON,53
CORPORATE
industry experience in sales,marketing and President and Chief Operating Officer,
general management. P g
ConAgra International,and Chief Operating MANAGEMENT
GEORGE R.HAEFNER,58 Officer,ConAgra Grain Processing EXECUTIVE COMMITTEE
President and Chief Operating Officer, Companies
ConAgra Poultry Company Named to the Office of the President in 1987. CHARLES M.HARPER
Named to the Office of the President in 1986. Joined ConAgra in 1982 when Peavey Chairman and Chief Executive Officer
Joined ConAgra in 1982 as president of Company merged with ConAgra.Thirty years
Country Pride Foods.Thirty-four years of food of experience in the grain merchandising and PHILIP B.FLETCHER
and poultry industry experience;formerly commodity trading industries. President and Chief Operating Officer
associated with The Pillsbury Company and JAMES R.TINDALL,45
Imperial Foods. OFFICE OF THE PRESIDENT
President and Chief Operating Officer,
LEROY O.LOCHMANN,56 ConAgra Prepared Food Companies (The eight executive shown above.)
President and Chief Operating Officer, Named to the Office of the President when he L.B.THOMAS
Armour Swift-Eckrich joined ConAgra in 1990.Twenry-one years of Senior Vice President,Finance and
Named to the Office of the President in food and consumer goods industry experience Corporate Secretary
November 1990.Joined ConAgra in August in general management,marketing,sales and
1990 when ConAgra acquired Beatrice product management;formerly associated with GERALD B.VERNON
Company.President of Swift-Eckrich 1984- The Quaker Oats Company. Senior Vice President, Human Resources
1990.Thirty-eight years of meat industry
experience in operations and management. JAMES D.WATKINS,43 CORPORATE STAFF
FLOYD MCKINNERNEY,54 President and Chief Operating Officer,
President and Chief Operating Officer, Named
Valley and Lamb-Weston WALTER H.CASEY
Named to the Office of the President in August Vice President, Corporate Communications
ConAgra Agri-Products Companies 1991 after Golden Valley Microwave Foods, _
Named to the Office of the President in 1987. Inc.merged with ConAgra.Twenty years of JOHN J.DILL
Joined ConAgra in 1978 as president of Mid experience in the development and marketing Vice President, Taxes
Valley Chemicals.Thirty years of experience in of microwave Food products.Founder of
the agricultural chemical industry;formerly co- Golden Valley Microwave Foods in 1978; P DAVID EPPENAUER
owner of Dennison's Chemical Company, formerly associated with The Pillsbury Vice President,Assistant Corporate Controller -
Weslaco,Texas. Company. RICHARD L.GADY
RICHARD L.MONFORT,37 Pie President,Public Affairs and
President and Chief Operating Officer, Chief Economist
ConAgra Red Meat Companies
Named to the Office of the President in 1989. C.WAYNE GANG,JR.
Joined ConAgra in 1987 when Monfort of Vice President,Insurance and Loss Control
Colorado,Inc.merged with ConAgra. FRANCIS A.GUTTER
President of Monfort 1987-1989.Seventeen Vice President, Internal Audit
years of meat industry experience in
purchasing,production,sales and management. DWIGHT J.GOSLEE
Vice President and Controller
REEDER E JONES
Pie President,Assistant Corporate Controller
L.JAMES KENNEDY CONAGRA GRAIN BEATRICE CHEESE COMPANY
Vice President, Corporate Director PROCESSING COMPANIES ROBERT H. BURNS,President
of Marketing T.TRUXTUN MORRISON CONAGRA DIRECT MARKETING
PAULA.KORODY Chief Operating Officer
COMPANIES
Vice President, Government Affairs THOMAS L.MANUEL, President PATRICK K.STEWART,President
JAMES A.MORTENSEN CONAGRA FEED COMPANY CONAGRA FOODSERVICE
Vice President,Industrial Relations CLARENCE T BARINOWSKI, COMPANIES
JAMES R O'DONNELL President ANTHONY J.REBELLO, President
Vice President, Corporate Treasurer CONAGRA FEED INGREDIENT CONAGRA FROZEN FOODS
DAVID G.PEDERSON MERCHANDISING COMPANY CHUCK D.WEIL, President
GARY P.WHITE,President
Vice President, Compensation and Benefits CONAGRA SHRIMP COMPANIES
JOSEPH V.PETTY CONAGRA FLOUR MILLING SINGLETON SEAFOOD COMPANY
COMPANY JESSE GONZALEZ,President
Vire President,Management THOMAS L.MANUEL, PresidentII Information Systems COUNTRY SKILLET CATFISH
CONAGRA SPECIALTY GRAIN COMPANY
LYNN L.PHARES PRODUCTS COMPANY RICHARD D.STEVENS, President
Vice President, Public Relations MICHAEL D.WALTER, President
and Community Affairs O'DONNELL-USEN CANADA
SCOTT W KAHN UNITED SPECIALTY FOOD SAMUEL B. HANNAM, Executive Vice
INGREDIENTS COMPANIES President and General Manager
Corporate Vice President, BOB J.POWDRILL, President
Internal Development O'DONNELL-USEN U.S.A.
JANET M.RICHARDSON CONAGRA INTERNATIONAL
THOMAS J.LAVAN, Vice President and
Vice President, Corporate Facilities T.TRUXTUN MORRISON General Manager
and Services President and Chief Operating Officer TRIDENT SEAFOODS CORPORATION
DONALD J.STONE CONAGRA ASIA-PACIFIC (50-percent owned)
Vice President, "Transportation KENNETH C. DAVIS, Managing Director, CHARLES H.BUNDRANT, President
ROBERT J.WHITE and Executive Vice President, Far Fart, CONAGRA RED MEAT COMPANIES
ConAgra International
Vice President, Corporate Planning RICHARD L.MONFORT
and Development CONAGRA EASTERN EUROPE President and Chief Operating Officer
CONAGRA SOVIET UNION CONAGRA FRESH MEATS COMPANY
ROBERT H.PEYTON, President,and ALAN E GLUF.CK, President
INDEPENDENT Executive Vice President, ConAgra
OPERATING COMPANIES International COOK FAMILY FOODS,LTD.
CONAGRA EUROPE EUGENE J.DEMBKOSKI,President
ARMOUR SWIFT-ECKRICH RAYMOND R.DESTIN,Managing E.A.MILLER INC.
LEROY O.LOCHMANN Director, and Executive Vice President,Europe, TED A. MILLER,President
President and Chief Operating Officer ConAgra International
MAPELLI BROTHERS COMPANY
ARMOUR FOOD COMPANY CONAGRA LATIN AMERICA DONALD D. MUELLER,President
JOHN D.LIKOVICH,President NOEL L. ROBYN,Managing Director,and
BUTTERBALL TURKEY COMPANY Executive Vice President, Latin America, MONFORT FINANCE COMPANY
"THOMAS E. HOWF„ President ConAgra International R. LARRY EATON, President
LONGMONT FOODS CONAGRA TRADING COMPANIES MONFORT,INC.
MICHAEL P.STREAK, President THOMAS M.RACCIATTI, President MICHAEL L.SANEM,President
SWIFT-ECKRICH PREPARED FOODS GELDERMANN,INC. MONFORT PORK DIVISION
GREGG A.OSTRANDFR,President KEVIN D.MACK,President and Chief DAVID W.VAN WERT,President
Executive Officer
CONAGRA AGRI-PRODUCTS GOLDEN VALLEY AND LAMB-WESTON
COMPANIES CONAGRA POULTRY COMPANY JAMES D.WATKINS,President and Chief
-FLOYD MCKINNERNEY GEORGE R.HAEFNER Operating Officer
Chief Operating Officer President and Chief Operating Officer
President and Chi
f p g fft GOLDEN VALLEY MICROWAVE
CONAGRA FERTILIZER COMPANY CONAGRA BROILER COMPANY FOODS,INC.
MICHAEL.T LAPSYS, President CLYDE M.SASSER,President GENE W.COOK, President
CONAGRA RETAIL COMPANIES MOTT'S-BLUE COACH LAMB-WESTON,INC.
ANTHONY J.SEITZ, President JERRY R. NELSON, President RICHARD A.PORTER,President
ECOLOGICAL CHEMICAL PRODUCTS PROFESSIONAL FOOD SYSTEMS HUNT-WESSON,INC.
COMPANY(50-percent owned) KENNETH P. GROWN, President ALBERT J.CROSSON
MARK M.MONTGOMERY, President CONAGRA PREPARED President and Chief Operating Officer
UNITED AGRI PRODUCTS FOOD COMPANIES
COMPANIES JAMES R.TINDALL
PHILIP J.JAMES, President President and Chief Operating Officer
CONAGRA LOCATIONS
ARMOUR SWIFT-ECKRICH CONAGRA GRAIN CONAGRA ASIA-PACIFIC
Headquarters in Downers Grove,Illinois. PROCESSING COMPANIES Headquarters in Singapore.
Headquarters in Omaha,Nebraska. Meat processing plants and trading offices
Product development facility in in Australia,trading offices in Hong Kong,
Downers Grove and 31 lams in 13 CONAGRA FEED COMPANY
p Headquarters in Augusta, Georgia. Singapore and Minneapolis and two
states serving— joint venture food processing plants
Facilities in three states include three
ARMOUR FOOD COMPANY formula feed plants,one warehouse and in Thailand.
Headquarters in Omaha,Nebraska. eight retail operations. CONAGRA EASTERN EUROPE
ARMOUR SWIFT-ECKRICH CONAGRA FEED INGREDIENT CONAGRA SOVIET UNION
DELHFOODSERVICE COMPANY MERCHANDISING COMPANY Headquarters in Omaha, Nebraska.
Headquarters in Downers Grove,Illinois. Headquarters in Omaha, Nebraska. Frozen prepared foods distribution
BUTTERBALL TURKEY COMPANY Merchandising offices in Arizona, operation in the Soviet Union.
Headquarters in Downers Grove, Illinois. California,Colorado,Nebraska and CONAGRA EUROPE
111 SWIFT-ECRRICH PREPARED FOODS Tennessee. Headquarters in Brussels,Belgium.
Headquarters in Downers Grove, Illinois. CONAGRA FLOUR MILLING Beef,poultry and ham processing plants,
COMPANY animal feed plants and a frozen seafood
I,ONGMDNT FOODS
Headquarters, tusk hatchery growing Headquarters in Omaha,Nebraska. distribution center in France,Portugal,
Twenty—eight flour mills in 15 states. Spain and the United Kingdom.
complex and processing plant in
Longmont, Colorado. Branded and private label flour and CONAGRA LATIN AMERICA
cornmeal products produced at plants in Headquarters in Miami, Florida.
Alabama,Colorado and Texas. Three feed plants,a flour mill,a dry corn
CONAGRA AGRI-PRODUCTS CONAGRA SPECIALTY GRAIN mill,a food distribution center and a
COMPANIES PRODUCTS COMPANY broiler growing and processing complex
Headquarters in Greeley, Colorado. Headquarters in Omaha,Nebraska. in Puerto Rico;trading office in
CONAGRA FERTILIZER COMPANY Four oat mills and two dry corn mills in Mexico City.
Headquarters in Knoxville, Tennessee. four states,Canada and the United CONAGRA TRADING COMPANIES
Facilities in 20 states include liquid and Kingdom. Seven barley malting facilities in Headquarters in Minneapolis,Minnesota.
dry fertilizer processing operations and Australia and one in the United Kingdom. International trading offices as described
terminals,propane gas operations and a UNITED SPECIALTY FOOD above.Wool processing plants and trading
soil testing lab.Twenty-six U.S.sales INGREDIENTS COMPANIES offices in Australia;an 18-state U.S.
offices and five international trading Headquarters in Omaha,Nebraska. network of Peavey Grain merchandising
offices. Two food ingredients plants and a research offices and over 100 grain elevators,river
CONAGRA RETAIL COMPANIES and development facility in Kentucky.A loading facilities and export elevators;
Headquarters in Grand Island Nebraska. spice plant in Illinois and seasonings about 1100 Peavey barges and 20 line haul
Ninety-one stores under the Country plants in Massachusetts,Michigan and boats;about 45 Berger bean processing
General,Wheelers,S&S,Sandvig's and New Jersey. and packaging facilities in eight states,
Peavey Ranch and Home names in eight Canada,South America and Turkey;olive
central states and California;ninety-eight oil and soybean processing plants in
Northwest Fabrics&Crafts stores in 16 CONAGRA INTERNATIONAL Argentina;and Petrosul sulfur processing
northern-tier states and Texas. Headquarters in Omaha, Nebraska. facilities in Canada.
ConAgra International operates international
UNITED AGRI PRODUCTS trading offices in 23 countries,doing GELDERMANN, INC.
COMPANIES business as Australia Meat Holdings Ltd., Headquarters in Chicago, Illinois.
Headquarters in Greeley Colorado. Berger and Company,Camerican More than 100 commodity futures
Over 300 field sales,administration, International,ConAgra International, brokerage offices,agencies and introducing
warehouse and formulation locations in ConAgra Grain Companies,ConAgra Wool brokers in the U.S.,Canada and Europe. .
39 states and Canada. Ltd.,CTC,Geldermann,Inc., Kurt A.
Becher GmbH &Co.KG, Peavey Grain
Company, Pecom Agra and Woodward&
Dickerson. ConAgra International also has -
processing businesses in Australia,Canada,
Europe,Latin America,Thailand and
the U.S.
CONAGRA POULTRY COUNTRY SKILLET CATFISH GOLDEN VALLEY AND
COMPANY COMPANY
Headquarters in El Dorado,Arkansas. Headquarters in Isola,Mississi i. LAMB-WESTON
pP Headquarters in Edina,Minnesota.
CONAGRA BROILER COMPANY Processing operations in Isola and Belzoni,
Headquarters in El Dorado,Arkansas. Mississippi. GOLDEN VALLEY MICROWAVE
Nine broiler growing and processing O'DONNELL-USEN CANADA FOODS, INC.
divisions in Alabama,Arkansas,Delaware, Headquarters in Halifax Nova Scotia. Headquarters in Edina,Minnesota.
_ Georgia,Louisiana and Maryland.One Processing plants and fishing operations in Nine plants in Illinois,Indiana,Iowa,
ota,Ohio and Washinton. Popcorn
poultry further-processing plant in Nova Scotia and Prince Edward Island. o'rageswarehou e in Nebraska and product
Maryland. development facility in Eden Prairie,
O'DONNELL-USEN U.S.A.
MOTT'S-BLUE COACH Headquarters and processing plant in Minnesota.
Headquarters in El Dorado,Arkansas. Gloucester,Massachusetts. LAMB-WESTON, INC.
Six poultry processing plants in Georgia, Headquarters in Kennewick, Washington.
TRIDENT SEAFOODS CORPORATION Eight plants in Idaho,Oregon,Washington
Illinois, Kentucky,Mississippi and
Tennessee. (50-percent owned) and the Netherlands.Product development
HeadquarterPROFESSIONAL FOOD SYSTEMS Three plantss in Seattl,in Alaska and�two n. facility in Richland,Washington.
Headquarters in El Dorado,Arkansas. Washington. One catcher processor and six
Twenty-two sales and distribution units in floating processors in the Bering Sea and HUNT-WESSON, INC.
4 states. North Pacific Ocean. Headquarters in Fullerton, California.
Facilities include 24 manufacturing plants, 12
CONAGRA PREPARED FOOD CONAGRA RED MEAT distribution and customer service centers and
37 grocery and foodservice sales offices in 23
Ares and Canada.Product development
COMPANIES COMPANIES
Headquarters in Omaha,Nebraska, Headquarters in Greeley Colorado. facility in Fullerton.
BEATRICE CHEESE COMPANY CONAGRA FRESH MEATS COMPANY
Headquarters in Waukesha, Wisconsin. Headquarters in Greeley, Colorado.
Twenty plants and distribution centers and Three plants in Idaho,Nebraska and Texas.
an imported cheese division in 13 states.
COOK FAMILY FOODS, LTD.
CONAGRA DIRECT MARKETING Headquarters in Lincoln, Nebraska.
COMPANIES Two plants in Nebraska and Kentucky.
Headquarters in Omaha,Nebraska.
Sales offices, manufacturing operations and E.A. MILLER INC.
distribution centers in California,Florida, Headquarters in Hyrum, Utah.
Processing facilities in Utah and a feedlot
Illinois,Nebraska,Oregon, Virginia,
Canada and the United Kingdom, in Idaho.
CONAGRA FOODSERVICE COMPANIES MAPELLI BROTHERS COMPANY
Headquarters in Omaha, Nebraska. Headquarters in Greeley, Colorado.
Fifty-four sales and distribution branches in
Four processing plants in Alabama,
Colorado,Louisiana and Tennessee. 29 states.
Warehousing operations in Louisiana and MONFORT FINANCE COMPANY
Tennessee. Product development facility Headquarters in Greeley, Colorado.
in Omaha.
MONFORT, INC.
CONAGRA FROZEN FOODS Headquarters in Greeley, Colorado.
Headquarters in Omaha, Nebraska. Thirteen plants in Colorado, Indiana, Iowa,
Eight plants in Arkansas,California, Iowa, Kansas, Kentucky,Minnesota,Missouri,
Missouri and Virginia.Two broiler growing Nebraska and Texas.Three feedlots in
and processing complexes in Arkansas. Colorado.
Product development facility in Omaha.
CONAGRA SHRIMP COMPANIES
Headquarters in Tampa,Florida.
Main processing plant in Florida;
waterfront unloading facilities and
processing and freezing operations in
Louisiana;sales offices in California,
Florida, Louisiana,Mississippi and
New York.
BOARD OF DIRECTORS
KEVIN A. BOUSQUETTE,34 L.D. MCGEHEE,69 WILLIAM G. STOCKS,64
New York,New York.Executive Ruston,Louisiana.Chairman of the Phoenix,Arizona.Former chairman
with Kohlberg Kravis Roberts&Co. board of Northwest Louisiana of the board and chief executive
(investments)and limited partner of Production Credit Association officer of Peavey Company.Director
KKR Associates,L.P. Director (agricultural financing).Director since 1982.
since 1990. since 1974.
MICHAEL T.TOKARZ,41
ROBERT B.DAUGHERTY, 69 KENNETH W. MONFORT,62 New York,New York.Executive
Omaha,Nebraska.Chairman of the Greeley,Colorado.Former president with Kohlberg Kravis Roberts&Co.
board of Valmont Industries,Inc., and chief operating officer of (investments)and limited partner of -
Valley,Nebraska(irrigation ConAgra Red Meat Companies. KKR Associates,L.P.Director
equipment,metal fabricating and Director since 1989. since 1990.
retail computer centers).
Director since 1968. GERALD RAUENHORST,63 FREDERICK B.WELLS, 63
Minneapolis,Minnesota.Chairman Minneapolis,Minnesota.President
illt PHILIP B. FLETCHER, 58 of the board and chief executive of Asian Fine Arts(fine arts
Omaha,Nebraska.President and officer of Opus Corporation retailing).Director since 1982.
chief operating officer of ConAgra. (architects,contractors and THOMAS R.WILLIAMS,62
Director since 1989. developers).Director since 1982. Atlanta,Georgia.President and
CHARLES M.HARPER,63 WALTER SCOTT,JR., 60 director of Wales Group,Inc.
Omaha,Nebraska.Chairman of the Omaha,Nebraska.President and (investment management and
board and chief executive officer of chairman of the board of Peter counseling).Director since 1978.
ConAgra.Director since 1975. Kiewit Sons',Inc.(construction, STEPHEN M.WOLF, 50
ROBERT A. !CRANE, 57 mining and packaging).Director Chicago,Illinois.Chairman,
since 1986.
Denver,Colorado.Consultant, president and chief executive officer
Knight,Roth&Associates.Former of UAL Corporation and president
president and chief executive officer and chief executive officer of United
of Central Bancorporation(financial Air Lines,Inc.Director since
services).Director since 1982. February 1991.
BOARD COMMITTEES
EXECUTIVE COMMITTEE AUDIT COMMITTEE COMPENSATION COMMITTEE
Robert B.Daugherty, Thomas R.Williams, L.D.McGehee,
Chairman Chairman Chairman
Philip B.Fletcher Kevin A.Bousquette Robert B.Daugherty
Charles M.Harper Robert A.Krane Gerald Rauenhorst
Walter Scott,Jr. Kenneth W.Monfort Michael T.Tokarz
William G.Stocks Frederick B.Wells Stephen M.Wolf
Standing from top. 4 : I I I111111I I
left to right _ __ 1 I ( t
Michael T. Tokarz,
Thomas R Williams -Kevin A.Bousquette,
Kenneth W Monfort t, ft
Walter Scott,Jr,
Charles M.Harper, E O 7 . -
Robert B. Daugherty, ,i F /
Gerald Rauenhorsb ` e a. I
Stephen M Wolf, 1 1 I
Robert A.Krane, f
(e \
L.D.McGehee, 1
William G. Stocks, 111
Philip B.Fletcher, r. f , If q
Frederick B. Wells _-
. 1111111
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�IESPONSIBILITIES
THE CONDUCT OF OUR AFFAIRS PRINCIPAL OFFICERS
The major objectives of the company are expressed in The principal officers of the company include,among
terms of return on stockholders'equitys growth in earnings others,those listed on pages 36 and 37 of this report.The
and growth in dollar volume.As we conduct ourselves in the principal officers are responsible for maintaining throughout
pursuit of our existing businesses and in the growth°four the company a system of intemal controls which protect the
businesses in an ethical and moral ways we must also Mil assets of the company on a reasonable and economic basis.
our commitments to our government, to our society and to They also are responsible for maintaining records which
ourselves as individuals. In one sense, ethics involves the point permit the preparation of financial statements that fairly
of view that suggests we live in a glass bowl and we should present the financial condition and results of operations of
feel comfortable with any actions we take, if they were shared the company in accordance with generally accepted
publicly Further, we will conduct our affairs within the law. accounting principles.
Should there be evidence of possible malfeasance on the
part of any officer or member of management; each person AUDIT COMMITTEE OF THE BOARD
must feel the responsibility to communicate that to the The Audit Committee of ConAgra's Board of Directors
appropriate party This is a commitment that each of us must is composed entirely of outside directors and recommends
undertake and not feel that it is a high-risk communication, the appointment of the company's independent public
but that it is expected and indeed an obligation. accountants.The Audit Committee meets regularly,and
—from ConAgra's Philosophy,page 4 when appropriate separately,with the independent public
(originally published in 1976) accountants,the internal auditors and financial management.
Both the independent public accountants and the internal
auditors have unrestricted arrecs to the Audit Committee.
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
ConAgra, Inc.
We have audited the accompanying consolidated balance sheets of ConAgra, Inc. and subsidiaries, ConAgra Basic
Food Companies and ConAgra Finance Companies, as of May 26, 1991 and May 27, 1990, and the related
statements of earnings, common stockholders' equity and cash flows for each of the three years in the period ended
May 26, 1991. These financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements.An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation.We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of ConAgra, Inc. and subsidiaries, ConAgra Basic Food Companies and ConAgra Finance
Companies, as of May 26, 1991 and May 27, 1990, and the results of their operations and their cash flows for each of
the three years in the period ended May 26, 1991 in conformity with generally accepted accounting principles.
Deloitte &Touche
July 18, 1991
Omaha, Nebraska
CONSOLIDATED FINANCIAL STATEMENTS
ConAgra,Inc.and Subsidiaries
Consolidated Statements of Earnings
In millions exeept per share amounts
CONSOLIDATED
For the fiscal years ended May 1991 1990 1989
Net sales $19,504.7 $15,501.2 $11,340.4
Costs and expenses
Cost of goods sold 16,932.2 13,846.5 9,873.9
Selling,administrative and 1 7829 1,151.3 1,022.0
general expenses
Interest expense(Note 9) 298.0 170.6 132.3
Nonrecurring items,net(Note 19) — (6.0)
19,013.1 15,162.4 11,028.2
Income before equity in earnings
of unconsolidated subsidiaries
and income taxes 491.6 338.8 312.2
Equity in earnings(loss)of 23.6 18.1
unconsolidated subsidiaries(Note 5)
Income before income taxes 515.2 356.9 312.2
Income taxes(Note 8) 204.0 125.2 114.3
Net income 311.2 231.7 197.9
Less preferred dividends 19.5 1.3 .9
Net income available for common stock $ 291.7 $ 230.4 $ 197.0
Income per common and common
equivalent share $ 2.13 $ 1.87 $ 1.63
Weighted average number of
common and common equivalent
shares outstanding 136.9 123.2 120.6
BASIC FOOD COMPANIES FINANCE COMPANIES
1991 1990 1989 1991 1990 1989
$19,351.1 $15,321.1 $11,196.6 $153.6 $180.1 $143.8
16,932.2 13,846.5 9,873.9 - - -
1,661.1 1,010.0 906.4 121.8 141.3 115.6 }
278.4 146.2 113.2 19.6 24.4 19.1
(6.0) - - - -
18,871.7 14,996.7 10,893.5 141.4 165.7 134.7
479.4 324.4 303.1 12.2 14.4 9.1
23.7 17.8 (.3) (.1) .3 .3
503.1 342.2 302.8 12.1 14.7 9.4
198.2 118.5 110.5 5.8 6.7 3.8
304.9 223.7 192.3 6.3 8.0 5.6
19.5 1.3 .9 - - -
$ 285.4 $ 222.4 $ 191.4 $ 6.3 $ 8.0 $ 5.6
The accompanying notes are an integral pan of the consolidated financial statements.
Consolidated Balance Sheets
May 26, 1991 and May 27,1990
Dollars in millions except per share amount
CONSOLIDATED BASIC FOOD COMPANIES FINANCE COMPANIES
ASSETS 1991 1990 1991 1990 1991 1990
Current assets
Cash $ 92.1 $ 43.0 $ 86.0 $ 38.8 $ 6.1 $ 4.2
Cash equivalents 623.6 77.5 580.2 2.8 43.4 74.7
Receivables,less allowance for
doubtful accounts of
$41.1 and$32.8 (Note 3) 1,228.9 1,305.7 996.3 1,015.7 232.6 290.0
Margin deposits and segregated
funds 250.8 212.9 - - 250.8 212.9
Inventories(Note 4)
Hedged commodities 520.2 586.8 520.2 586.8 — —
Other 1,499.6 1,062.0 1,374.1 902.0 125.5 160.0
Total inventory 2,019.8 1,648.8 1,894.3 1,488.8 125.5 160.0
Prepaid expenses 127.7 59.8 116.6 53.4 11.1 6.4
Total current assets 4,342.9 3,347.7 3,673.4 2,599.5 669.5 748.2
Other assets
Investments in unconsolidated
subsidiaries
(Notes 2 and 5) 228.0 136.1 228.0 133.1 - 3.0
Sundry investments,deposits
and noncurrent
receivables 140.7 32.2 132.4 19.4 8.3 12.8
Deferred income taxes(Note 8) 46.3 — 46.3 — — —
Total other assets 415.0 168.3 406.7 152.5 8.3 15.8
Property,plant and equipment
(Note 9)
Cost(Note 6) 2,740.1 1,703.6 2,726.8 1,690.0 13.3 13.6
Less accumulated depreciation 798.6 668.9 789.2 659.7 9.4 9.2-
Properry,plant and
equipment,net 1,941.5 1,034.7 1,937.6 1,030.3 3.9 4.4
Unamortized finance expense 10.0 2.0 10.0 2.0 — —
Brands,trademarks and goodwill,
at cost less accumulated
amortization of
$104.8 and$41.7 2,710.9 251.5 2,698.9 236.3 12.0 15.2
$9,420.3 $4,804.2 $8,726.6 $4,020.6 $693.7 $783.6
LIABILITIES AND CONSOLIDATED BASIC FOOD COMPANIES FINANCE COMPANIES
STOCKHOLDERS'EQUITY 1991 1990 1991 1990 1991 1990
Current liabilities
Notes payable(Note 7) $ 256.9 $ 331.5 $ — $ 134.0 $256.9 $197.5
Current installments of
long-term debt 537.7 51.4 537.7 51.4 — —
Accounts payable and accrued
liabilities 2,363.4 1,390.0 2,324.2 1,346.4 39.2 43.6
Advances on sales 581.3 704.7 581.3 704.7 — —
Payable to customers,
clearing associations,etc 274.8 426.1 — — 274.8 426.1 r
Dividends payable 28.2 18.4 28.2 18.4 — —
Income taxes (Note 8) 45.1 45.4 45.1 45.4 — —
Total current liabilities 4,087.4 2,967.5 3,516.5 2,300.3 570.9 667.2
Senior long-term debt,excluding
current Installments
(Note 9) 1,663.0 605.4 1,663.0 605.4 — —
Deferred income taxes
(Note 8) — 103.3 — 103.3 — —
Commitments and contingencies
(Notes 14&15)
Other noncurrent liabilities
(Note 10) 1,066.4 — 1,066.4 — — —
Subordinated debt(Note 9) 430.0 30.0 400.0 — 30.0 30.0
Preferred shares subject to
mandatory redemption
(Notes 11 & 13) 356.1 2.2 356.1 2.2 — —
Common stockholders' equity
(Notes 11 & 12)
Common stock of$5 par
value,authorized 600 000,000
shares; issued 139,789,287
and 122,852,450 698.9 614.3 698.9 614.3 .5 .5
Additional paid-in capital 439.3 - 439.3 - 69.7 69.7
Retained earnings 692.5 490.6 692.5 490.6 21.8 15.5
Foreign currency translation
adjustment (.4) 1.3 (.4) 1.3 .8 .7
1,830.3 1,106.2 1,830.3 1,106.2 92.8 86.4
Less treasury stock,at cost-
common shares 115,284
and 123,167 (3.6) (2.4) (3.6) (2.4) -Ins unearned restricted stock (9.3) (8.0) (9.3) (8.0) - -
Less equity of Finance
Companies - - (92.8) (86.4) - -
Total common
stockholders'equity 1,817.4 1,095.8 1,724.6 1,009.4 92.8 86.4
$9,420.3 $4,604.2 $8,726.6 $4,020.6 $693.7 $763.6
The accompanying notes are an integral part of the consolidated financial statemena.
Consolidated Statements of Comtnon Stockholders' Equity
Columnar dollars in millioru
•
Foreign
Additional Currency Unearned
Common Paid-In Retained Translation Treasury Restriaed
Stock Capital Eamings Adjusmrent Stock Stock Total
Balance at May 29, 1988 $395.0 $ .9 $434.6 $1.5 $(27.3) $ - $ 804:7
684,821 shares issued in connection with
employee stock option plan - - (8.8) - 13.4 - 4.6
278,339 shares issued in connection with
incentive plans - .1 - - 5.3 - 5.4
504,000 shares issued in connection with the
executive stock purchase plan - - (7.9) - 9.5 - 1.6
Conversion of 38,822 shares of preferred stock
into 179,363 shares of common stock - - (2.5) - 3.4 - .9
Purchase of 1,025,715 shares for treasury - - - - (20.9) - (20.9)
2,955,669 shares issued in connection with the
acquisition of Cook Family Foods,Ltd 9.8 (1.0) 7.8 - - - 16.6
Foreign currency translation adjustment - - - (.9) - - (.9)
Cash dividends declared
Preferred stock - - (.9) - - - (.9)
Common stock,$.50 per share - - (59.5) - - - (59.5)
Net income - 197.9 - - 197.9
Balance at May 28, 1989 404.8 - 560.7 .6 (16.6) - 949.5
641,706 shares issued in connection with
employee stock option plans - - (8.7) - 15.3 - 6.6
697,869 shares issued in connection with
incentive plans - 1.7 - - 14.4 (8.0) 8.1
1,160,983 shares issued in connection with
acquisitions 4.8 (1.8) .9 - - - 3.9
Conversion of 259,408 shares of preferred
stock into 1,198,740 shares of common stock 1.2 .1 (19.1) - 24.3 - 6.5
Purchase of 1,578,946 shares for treasury - - - - (39.8) - (39.8)
Three-for-two stock split 203.5 - (203.5) - - - -
Foreign currency translation adjustment - - - .7 - - .7
Cash dividends declared
Preferred stock - - (1.3) - - - (1.3)
Common stock,$.58 per share - - (70.1) - - - (70.1)
Net income - 231.7 - - 231.7
Balance at May 27, 1990,carried forward $614.3 $ - $490.6 $1.3 $ (2.4) $(8.0) $1,095.8
Columnar dollars in million,
Foreign
Additional Currency Unearned
Common Paid-In Retained Translation Treasury Restricted
Stock Capital Earnings Adjustment Stock Stock Total
Balance at May 27, 1990,brought forward $614.3 $ - $490.6 $1.3 $(2.4) $(8.0) $1,095.8
1,051,307 shares issued in connection with
employee stock option plan 5.1 10.6 (.2) - .5 - 16.0
340,043 shares issued in connection with
incentive plans 1.2 7.2 - - 2.0 (1.3) 9.1
11,080,124 shares issued in connection with
acquisitions 55.4 299.5 - - - - 354.9
Conversion of 38,021 shares of preferred
stock into 175,682 shares of common stock .9 - - - - - .9
Purchase of 102,850 shares for treasury - - - - (3.7) - (3.7)
Sale of 4,400,000 common shares 22.0 122.0 - - - - 144.0
Foreign currency translation adjustment - - - (1.7) - - (1.7)
Cash dividends declared
Preferred stock - - (19.5) - - - (19.5)
Common smock,$.67 per share - - (89.6) - - - (89.6)
Net income - - 311.2 - - - 3112
Balance at May 26, 1991 $698.9 $439.3 $692.5 $(.4) $(3.6) $(9.3) $1,817.4
The accompanying notes are an integral pan of the consolidated financial statements.
Consolidated Statements of Cash Flows
Dollars in million-
For the focal years ended May
Increase(Decrease)in Cash and Cash Equivalents CONSOLIDATED
19
Cash flows from operating activities 91 1990 lggg
Net income $ 311 2
Adjustments to reconcile net income to net cash $ 231.7 $ 197.9
provided by operating activities
Depreciation and amortization 250.8
Provision for deferred income taxes 129.7 101.7
Provision for losses on accounts receivable 102.7 (10.8) 8.7
16.6 18.1 19.7 Writedown ofproperry,plant and equipment in
u.' connection with realignment of processed
meats operations 13.6 —
Undistributed (earnings)loss of unconsolidated
subsidiaries (236) (181)
Issuance of common stock in connection
with the management incentive plans 91
Other noncash items,primarily interest 8.1 5.4
Change in assets and liabilities before effects 62.9__
from business acquisitions
Receivables (93.4)
Inventories 2525 (94'9) 112.1
Prepaid expenses (1872) (133.7)
Accounts payable and other liabilities (6) 10.9 (11.9)
Interest and income taxes payable (232'6) 180.5 101.6
Noncurrent deferred income taxes 31.1 29.4 (1.5)
5.1 5.6 5.8
Net cash flows from operating activities 691.8 316.6
Cash flows from investing activities 405.8
Proceeds from sale of property,plant and equipment 70.3
Additions to property,plant and equipment 8.7 21.8
(331'8) (196.3) (163.5)
(Increase)decrease in investment in unconsolidated
subsidiaries 24.5
Change in equity of Finance Companies ( ) (24.7) (35.4)
Payment for business acquisitions 769.9
Other items ( ) (17.6) (149.6)
Net cash flows from investing activities ('6) (6.6) (20,7)
(1,056.5) (236.5) (347.4)
Cash flows from financing activities
Net short-term borrowiii s 158.4) (111 Proceeds from issuance o long-term debt 1(354.79 68.6
Proceeds from sale of accounts receivable 73.9 116.8
Proceeds from exercise of employee stock options 400.0__
Redemption of SIPCO preferred stock 16.0 6.6 4 6
Cash dividends paid — (28.2) _
Repayment of long-term debt (99.3) (69.8 ( )
Treasury stock purchases (552.4) (174.5) (32.4)
Common stock sale (3.7) (39.8) (20.9) _
Other items,primarily payments on other noncurrent 144.0 _ _
liabilities (141.0) 3.5
Net cash flows from financing activities 9
959.9 (340.0) 79.2
Net increase(decrease)in cash and cash
equivalents 595.2 259.9
Cash and cash equivalents at beginning of year . 120.5 (38 ) 137.6
Cash and cash equivalents at end of year 0.4 p42
$ 715.7 $120.5 $ 380.4
BASIC FOOD COMPANIES FINANCE COMPANIES
1991 1990 1989 1991 1990 1989
$ 304.9 $ 223.7 $ 192.3 $ 6.3 $ 8.0 $ 5.6
246.1 124.7 97.7 4.7 5.0 4.0
102.7 (10.8) 8.7 - - -
14.0 14.6 14.6 2.6 3.5 5.1
13.6 - - - - . .
(23.7) (17.8) .3 .1 (.3) (3)
9.1 8.1 5.4 - - -
62.9 - - - - -
(110.3) (99.5) (29.7) 16.9 4.6 141.8
218.0 (207.4) 46.4 34.5 20.2 (180.1)
4.1 1.3 4.1 (4.7) 9.6 (16.0)
(77.2) 124.0 138.0 (155.4) 56.5 (36.4)
31.4 29.4 (1.6) (.3) - .1
5.1 5.6 5.8 - - -
787.1 209.5 482.0 (95.3) 107.1 (76.2)
68.6 8.5 21.5 1.7 .2 .3
(328.9) (195.5) (162.0) (2.9) (.8) (1.5)
(27.5) (25.4 (36.0) 3.0 .7 .6
(.1) (.1 (10.4) .1 .1 10.4
(769.9) (17.6 (149.6) - - -
(5.0) (2.6) (13.2) 4.4 (4.0) (7.5)
(1,062.8) (232.7) (349.7) 6.3 (3.8) 2.3
(218.0) (13.2) (4.4) 59.6 (98.5) 73.0
1,354.7 73.9 116.8 - - -
400.0 - - - - -
16.0 6.6 4.6 - - -
28.2
(99.3) 69.8 (58.4) - - -
(552.4) (174.5) (32.4) - - -
(3.7) (39.8) (20.9) - - -
144.0 - - - - -
(141.0) 3.5 .9 - - -
900.3 (241.5) 6.2 59.6 (98.5) 73.0
624.6 (264.7) 138.5 (29.4) 4.8 (.9)
41.6 306.3 167.8 78.9 74.1 75.0
$ 666.2 $ 41.6 $ 306.3 $ 49.5 $ 78.9 $ 74.1
The accompanying notes are an integral pan of the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS transactions. Except for certain food products and livestock
Years ended May 26, 1991,May 27, 1990 and May 28, 1989 inventories which are stated at the lower of last-in,first-out
Columnar dollar amounts in millions except (LIFO) cost or market, inventories not hedged are priced at
per share amounts the lower of average cost or market.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY AND DEPRECIATION
Property,plant and equipment are carried at cost.
CONSOLIDATION AND FINANCIAL STATEMENT PRESENTATION Depreciation has been calculated using primarily the
The consolidated financial statements include straight-line method over the estimated useful lives of the
nonhomogeneous financial companies. In order to present related assets.
more meaningful financial statements, management believes
that the balance sheets, results of operations, and cash flows AMORTIZATION OF INTANGIBLES
of the consolidated company should be further grouped and Unamortized finance expense is being amortized over
s separately presented as follows: the life of the related obligations.
Brands and goodwill arising from the excess of cost of
BASIC FOOD COMPANIES: Except for the elimination of investment over equity in net assets at date of acquisition
investment and equity in earnings of the Finance and trademarks are being amortized using the straight-line
Companies, these financial statements include all method,principally over a period of 40 years.
consolidated operations on the same basis as reported
prior to the adoption in fiscal 1989 of Statement of NET SALES
Financial Accounting Standards No. 94, "Consolidation Gross margins earned from grain and feed ingredients
of All Majority-Owned Subsidiaries." merchandised are included in net sales.
FINANCE COMPANIES: Primarily includes a commodity INCOME TAXES
brokerage business, Geldermann, Inc., and a finance The parent company and all eligible wholly owned sub-
company, Monfort Finance Company. No parent sidiaries subject to United States income taxes file a con-
company guarantees have been issued supporting solidated federal income tax return.
borrowings of the Finance Companies. Deferred income taxes are provided for temporary dif-
ferences between financial and tax reporting in accordance
Thus, the consolidated financial statements include the with Statement of Financial Accounting Standards No. 96,
accounts of ConAgra, Inc. and all majority-owned including estimated recoverable deferred tax assets.
subsidiaries, except certain foreign companies that are not The aforementioned Statement No. 96 was adopted at
material to the Company.All significant intercompany the beginning of fiscal 1989,and had no material effect on
investments, accounts and transactions have been the net income or financial position of the Company.
eliminated.
The investments in and the operating results of 50- RETIREMENT BENEFITS
percent-or-less-owned companies and the foreign companies The Company and its subsidiaries have retirement plans
referred to above are included in the financial statements on covering substantially all salaried and hourly employees.
the basis of the equity method of accounting. Total pension expense includes provisions for retirement
The accounts of two wholly owned subsidiaries,ConAgra benefits, interest on unfunded past service costs,and
Fertilizer Company and United Agri Products,Inc.,have been amortization of past service costs over a 30-year period.The
consolidated on the basis of a year ending in February. Such Company has adopted a policy of funding accrued pension
fiscal period corresponds with those companies'natural costs to the extent deductible for tax purposes.
business year. Beginning in fiscal 1985, the estimated costs of medical
benefits to retiring employees are accrued at retirement and
INVENTORIES are not funded. The estimated costs of medical benefits to be
Grain, flour and major feed ingredient inventories are provided to retired employees which have not been accrued
hedged to the extent practicable and are generally stated at at May 26, 1991 are approximately$88.4 million.The
market including adjustment to market of open contracts for costs of medical benefits provided for all retired employees
purchases and sales. Short-term interest expense incurred to (including companies acquired) for 1991, 1990 and
finance hedged inventories is included in cost of sales in 1989 amounted to $24.9 million, $5.2 million and$2.7
order to properly reflect gross margins on hedged million, respectively.
Statement of Financial Accounting Standards No. 106, 1991 1990 1989
"Employers'Accounting for Postretirement Benefits Other Net sales $20,183 $16,165 $11,891
Than Pensions,"was issued in December 1990 and requires Net income 333 256 216
implementation by the Company by fiscal 1994.The Income per
Company has not determined the method of adoption and common&common
has not estimated the impact that adoption is expected to equivalent share $ 2.13 $ 1.91 $ 1.64
have on its financial statements.
1991
EARNINGS PER SHARE On August 14, 1990, Beatrice Company became a
Earnings per common and common equivalent share wholly owned subsidiary of ConAgra. Beatrice is a producer
are calculated on the basis of the weighted average and marketer of a wide range of food products for retail,
outstanding common shares and,when applicable,those foodservice and industrial markets. The purchase price
outstanding options that are dilutive and after giving effect consisted of 11,076,151 shares of ConAgra common stock, z
to the preferred stock dividend requirements. Fully diluted 141,955 shares of ConAgra Class E$2,500 cumulative
earnings per share did not differ significantly from primary convertible voting preferred stock Series 1, and approx-
earnings per share in any period presented. imately$628 million cash(net of certain warrant exercise
proceeds), for an aKregate of$1,362 million (including
CASH FLOWS estimated expenses of$24 million). ConAgra and certain
For purposes of the statement of cash flows,the former stockholders of Beatrice are parties to a Registration
Company considers all highly liquid investments purchased Rights and Standstill Agreement dated June 7, 1990
with a maturity of three months or less to be cash with respect to the common stock and the convertible
equivalents. preferred stock.
RECLASSIFICATIONS ConAgra has accounted for the Beatrice acquisition
Certain items in the financial statements have been as a purchase. Beatrice's net assets are included in the
reclassified to conform to 1991 classifications. accompanying consolidated balance sheet at values repre-
senting a preliminary allocation of the purchase price
2. BUSINESS COMBINATIONS to such net assets. The excess of purchase price over the
preliminary valuation of the net tangible assets is reflected
SUBSEQUENT EVENT as Brands,Trademarks and Goodwill and is being amor-
On July 11, 1991,Golden Valley Microwave Foods, Inc. tized over 40 years using the straight-line method.The
(Golden Valley) merged with ConAgra through an exchange preliminary purchase price allocation is subject to change
of.5676 of a share of ConAgra common stock for each share when additional information concerning asset and liability
of Golden Valley common stock. On a fully diluted basis valuations is obtained.Therefore, the final allocation may
ConAgra issued approximately 10.7 million shares of differ from the preliminary allocation. The preliminary
common stock for Golden Valley's 18.8 million shares of allocation is summarized as follows:
common stock. In addition, outstanding warrants for Current assets(net of warrant
600,000 shares of Golden Valley stock will be converted to exercise proceeds) $ 953
340,560 rights to buy ConAgra stock at$60.48 per Current liabilities ( 989)
share. The transaction is being accounted for as a pooling Working capital ( 36)
of interests. Other assets 380
Golden Valley is a leader in the development and Property,plant and equipment 765
marketing of foods specifically for preparation in microwave Brands,trademarks and goodwill 2,516
Long-term debt (1,105)
ovens. Products include popcorn, french fries, breakfast Other noncurrent liabilities* (1,158)
foods and sandwiches distributed through the vending $1,362
industry, mass merchandising outlets and grocery stores.
Golden Valley's sales were $172.3 million in the fiscal year *Preliminarily consists of the following estimated liabilities:
ended December 1990. Income taxes and interest thereon $ 740
The following selected unaudited pro forma Post retirement health care and
information combines ConAgra, Golden Valley and Lamb- pensions 240
Weston (see Note 5) assuming the merger was consummated Other 328
1,308
as of May 30, 1988: Less estimated current portion 150
$1,158
In May 1991,ConAgra completed the acquisition from in a transaction which has been accounted for as a pooling
Foster's Brewing Group Limited(formerly Elders IXL of interests. Cook produces branded ham products and
Limited) and various related entities,of certain assets of markets them nationally through retail channels. Financial
Elders Brewing Materials and Elders International Wool information for periods prior to this transaction have not
Division and a 50-percent interest in Elders Meat Division. been restated because of immateriality and, accordingly,
The acquisition of the Brewing Materials and Wool results of operation have been included since the date
Divisions occurred April 8, 1991 while the acquisition of the of acquisition.
Meat Division occurred May 24, 1991. ConAgras cash In February 1989,the Company acquired the grain
investment in the transaction of approximately$125 million merchandising division of The Pillsbury Company(including
was made from the proceeds of the November 29, 1990 sale receivables
6 ll and
grain
invent ri approximately)for
approximately$153llion million
to long-
Elders common stock(see Note 11). P P
Elders Meat is an Australian beef processor. Elders term debt.The acquired business operates grain handling and
Brewing Materials manufactures malt for brewers in storage facilities in the Midwest.
Australia,the United Kingdom and international markets. Except for Cook,all of these transactions have been recorded
Elders International Wool is a trader, processor and exporter as purchases.Results of operations of all of these acquired
of Australian wool. Combined annual sales of the three companies have been included in the financial statements since
businesses are approximately U.S. $1 billion,of which the effective dates of acquisition.
approximately$750 million is in the Meat Division which is The following unaudited summary,prepared on a pro forma
not consolidated(see Note 5). basis,combines the consolidated results of operations of the
Company for the years ended May 26, 1991 and May 27, 1990,
1990 with those of companies acquired through May 26, 1991
At May 28,1989,the Company had a 50-percent equity described above,as if such acquisitions had occurred
interest in the parent of SIPCO,Inc. and Val-Agri, Inc. May 29, 1989:
(SIPCONaI-Agri). In July 1989,the Company purchased the remaining 50-percent interest from Elkhorn Enterprises, 1991 1990
Inc.,effective May 29, 1989.The consideration for the Net sales $20,542 $20,066
purchase was the assumption by the Company of$51.5 Net income 301 223
million of long-term debt owed by Elkhorn Enterprises,Inc. Inand cme per common
ommon equivalent share $ 1.98 $ 1.47
In addition,long-term debt and preferred stock of SIPCO
totaling$160.0 million was assumed.
On May 31, 1989,the Company purchased the During fiscal 1991, 1990 and 1989,the Company
Sergeant's Pet Care Division of A. H. Robins Company for g
approximately$18.0 million in cash. acquired certain other businesses,the revenues and net
earnings of which did not significantly affect the
1989 consolidated results.
In June 1988,L.W.Acquisition, Inc. (LWA), a joint 3. RECEIVABLES
venture company owned equally by the Company and
Golden Valley acquired all of the outstanding capital stock During September 1990, the Company entered into
of Lamb-Weston, Inc. (Lamb-Weston) from Amfac Foods, agreements to sell,for a period of up to five years, undivided
Inc. Lamb-Weston is a major processor of frozen potato participation interests in designated pools of receivables,
products in the United States. Its major product line is with limited recourse, in an amount not to exceed$400
french fries which are marketed primarily to fast food million at any one time. Participation interests in new
restaurants and other foodservice markets.The purchase receivables may be sold as collections reduce previously sold
price was approximately$280 million.The Company and participation interests.The participation interests are sold at
Golden Valley each made$25 million cash investments in a discount which is included in Selling,Administrative and
LWA. LWA obtained$262 million of senior debt bank General Expenses in the consolidated statement of earnings.
financing,which is collateralized by the assets and capital Proceeds from the sales,net of applicable discount and fees,
stock of Lamb-Weston. were approximately$379 million as of May 26, 1991.
In October 1988,ConAgra acquired all of the Receivables of Monfort Finance Company include notes
outstanding capital stock of Cook Family Foods,Ltd. receivable of approximately$141 million and$50 million at
(Cook) in exchange for 3,267,000 shares of ConAgra May 26, 1991 and May 27, 1990, respectively.
common stock, including option shares for Cook employees,
4. INVENTORIES
1991 1990
The major classes of inventories are as follows: Current assets $ 512.2 $ 413.1
Noncurrent assets 590.0 406.9
1991 1990 Total assets 1,102.2 820.0
BASIC FOOD COMPANIES Current liabilities
2 399.8 306.8
Hedged commodities $ 520
$ 586.8 Noncurrent liabilities
Food products 738.6 435.7 287.4 282.0
Agricultural chemicals, Total liabilities 687.2 588.8
fertilizer and feed 186.9 201.1 Net assets $ 415.0 $ 2312
Retail merchandise 118.8 99.9 ConAgra's investment $ 228.0 $ 136.1
Other,principally
ingredients and supplies 329.8 165.3 991 990 989
1,894.3 488.8 Net sales $1,563.2 $1,233.5 $4,293.5
FINANCE COMPANIES Net income $ 41.9 $ 30.6 $ 17.2
Livestock 125.5 160.0 ConAgra's equity in
$2,019.8 $1,648.8 earnings $ 23.6 $ 18.1 $ - ry,
The cost of certain food products and livestock inventories 6. PROPERTY, PLANT AND EQUIPMENT
stated under the last-in,first-out(LIFO)method is$187.4 Following is a detail of property, plant and
million and $203.3 million at May 26, 1991 and May 27, equipment cost:
1990,respectively.Had these inventories been stated at lower of CONSOLIDATED OMP NIF,S COMPANIES
principally first-in,first-out(FIFO)costs or market,they would 1991 1990 1991 1990 1991 1990
have been$67.0 million and$64.5 million greater than reported Land
at May 26, 1991 and May 27, 1990,respectively. Buildings, $ 66.2 $ 41.8 $ 662 $ 41.8 $ — $ —
machinery and
5. INVESTMENTS IN AND ADVANCES TO
trucks,
equipment 2,3707 1,480,0 2,366.4 1,475.9 4.3 4.1
UNCONSOLIDATED SUBSIDIARIES Autos,
At the beginning of fiscal 1989, the Com an had trailers,etc 64.8 48.9 64.6 47.6 .2 1.3
P Y Furniture and
equity interests in Saprogal and Sapropor, food companies fixtures 100.5 65.4 91.8 57.5 8.7 7.9
operating in Spain and Portugal, respectively; Trident Construction in
Seafoods Corporation, a company operating in the progress 137,9 67.5 137.8 67.2 1 3
Northwest Pacific seafood industry; and a 50-percent $2,740.1 $1,703.6 $2,726.8 $1,690.0 $13.3 $13.6
interest in a corporation which controls SIPCO/Val-Agri.
During fiscal 1989, the Company acquired a 50-percent 7• SHORT-TERM CREDIT FACILITIES AND BORROWINGS
interest(decreased to 47.5 percent by the end of fiscal 1991) At May 26, 1991, the Finance Companies had$256.9
in the parent of Lamb-Weston. Golden Valley also owns a million of short-term borrowings outstanding, of which
47.5-percent interest in the parent of Lamb-Weston (see $250.3 million was attributable to Monfort Finance
Note 2). Company(MFC). Monfort Finance Company has
uncompensated credit facilities totaling$400 million.
During fiscal 199Q the Company acquired the
remaining 50-percent interest in the parent of SIPCO/Val- ConAgra does not guarantee Monfort Finance Company
Agri and the accounts of this company were included in the borrowings. The Company(exclusive of MFC) has short-
consolidated financial statements beginning in fiscal 1990 term credit lines from banks which totaled approximately
Isee Note 2). $3.3 billion including a$520.0 million revolving credit and
During fiscal 1991, the Company acquired a 50-percent term loan commitment(see Note 9); a$255.0 million
interest in Australia Meat Holdings, a corporation formed to revolver,which matures on November I, 1995; a $1.0 billion
acquire the assets of Elders Meat Division (see Note 2). revolving credit agreement which matures on August 15,
Thus, at May 26, 1991, the Company had equity,interests in 1993 and uncompensated bankers' acceptance and money
Saprogal (100 percent), Sapropor(75 percent),Trident market loan facili es approximating$1.6 billion.
Borrowings under the revolver agreements are at or below
Seafoods (50 percent), Lamb-Weston (47.5 percent), and
Australia Meat Holdings (50 percent), all included as prime rate and may be prepaid without penalty. The
investments in unconsolidated subsidiaries under the equity Company pays fees for its revolving credit facilities.
method of accounting. ConAgra finances its short-term needs with bank
borrowings, commercial paper borrowings and bankers'
Summary financial information of these companies
and certain other individually insignificant businesses, as acceptances. The average short-term borrowings outstanding
of the end of each year presented, is set forth below and under here facilities for the 1991 fiscal year were$1,267.1
includes amounts since date of acquisition of each respec- million. This excludes$394.6 million of short-term
rive equity interest. borrowings which were classified as long-term throughout
the fiscal year(see Note 9). The highest period-end short-
term indebtedness was $2,169.3 million. Short-term
borrowings were at rates below prime.
8. INCOME TAXES 9. SENIOR LONG-TERM DEBT, SUBORDINATED DEBT
Income taxes computed by applying the statutory rates AND LOAN AGREEMENTS
to income before income taxes are reconciled to the
provision for income taxes set forth in the financial 991 1980
BASIC FOOD COMPANIES
statements as follows: Senior Debt
1991 1990 1989 Long-term revolving credit and term loan
Computed U.S,federal agreements from banks(unsecured).... $ — $118.0
Commercial paper backed by long-term
income taxes $175.1
State income taxes,net of $121.4 $106.1 revolving credit agreements 620.0
federal tax benefit 18.7 9.75%senior debt due in 1998 300.0 —
Nondeductible amortization of 709 9.5 9.875%senior debt due in 2006 100,0
8.31°/o co 9.8%publicly issued unsecured
goodwill and other intangibles 19.9 3.2 1,0 medium-term notes due in various
Equity in earnings of
9.43%unsecured note due in 1993 amounts in 1993 through 2004 210.7
_ unconsolidated subsidiaries... (6.4) (4.7) _ 220.7
`-""'x^x- Other 9%unsecured note due in 1997 51.5 51.5
(3.3) (5.6) (2.3) 50.0 50.0
7.75%notes due in 1994,at imputed
Income taxes provided $204.0 $125.2
$114.3 race of 10.5% 80.9 —
The provision for income taxes includes the following: Industrial Development Revenue Bonds
(collateralized by plant and equipment)
1991 1990 lggg due various dates through 2014 at an
Current average rare of 7.24%and 7.06% 61.2 43.0
Miscellaneous unsecured 188,7 122.2
Federal $ 55.7 $104.5 $81.6
State 282 19.5 16.2 "Total senior debt
1 Foreign 17.4 12.0 9.75%subordinated debt due in 2021.... 400.0 605.4
7.8
101.3 136.0 105.6 Total excluding current installments-
Deferred 102.7 (10.8) 8 7 Basic Food Companies
2,063.0 605.4
$204.0 $125.2 $114.3 FINANCE COMPANIES
Deferred tax expense(benefit) results from temporary Geldetmann,Inc.subordinated
notes due in 1993 30.0 30.0
differences in the recognition of revenue and expenses and Consolidated long-term debt'excluding
basis of assets and liabilities for tax and financial statement urrent installments $2,093.0 $635,4
purposes.The sources of these differences and the tax effect The aggregate minimum principal maturities of the
of each were as follows: long-term debt for each of the five years following May 26,
1991 1990 1989 1991 are as follows:
Depreciation and amortization.. $ 10.1 $ 7.3
$q
Accrued expenses 23.2 (12.0) 3) BASIC FOOD FINANCE
Other noncurrent liabilities 39.9 — _ COMPANIES COMPANIES
Compensatory stock options of 1992 $537.7
acquired company 31.3 1993 89 6 $ —
Other (1.8) (6.1) 3.3 994 35.9 30.0
Total deferred taxes $102.7 $(10.8 7995 2.3
1 $8.7 1996 138.6 _
Under the terms of an unsecured revolving credit and
term loan agreement with seventeen banks, the Company
can borrow up to $520 million extending to August 23,
1995, when the borrowings may be converted to a term loan
payable in three equal annual installments. Borrowings are r
or below prime rate and may be prepaid without penalty. In
addition, the Company has a$255 million revolver which
matures on November 1, 1995 and a$1 billion revolver
which matures on August 15, 1993.
Geldermann's subordinated notes are placed with
banks and are subordinated to the claims of present and
future general creditors.The loans bear interest on a
floating rate basis (9.125%at May 26, 1991) and mature
on July 31, 1992. This is at a premium over the bank
certificates of deposit rate. The loan agreements stipulate
that these loans cannot be repaid if such repayment would
cause Geldermann, Inc. not to meet its regulatory
capital requirements.
The most restrictive note agreements (the three All classes are cumulative, nonparticipating and shall be
revolving credit facilities and certain privately placed long- issued in series with such designations, preferences, rights
term debt) provide that the lenders have the option to put and limitations as the Board of Directors may establish.
the debt back to the Company if long-term debt exceeds Such designation shall distinguish the shares of each series
60%of Consolidated Capital Base or if two national rating from the shares of all other series and classes.
agencies rate the company below investment grade. Each class of preferred stock is prohibited from having a
The 9.75%and 9.875%senior notes are non-callable priority over all previously issued classes of preferred stock as
and were issued at par.The senior notes were sold in designated by alphabetical class.
November 1990. On September 28, 1989, the Company's stockholders
The$400 million of 9.75%subordinated notes due approved an amendment to the Certificate of Incorporation
March 1, 2021,were sold in March 1991. The notes were increasing the authorized common stock from 300,000,000
issued at par and are non-callable. to 600,000,000 shares, $5 par value.
Net interest expense consists of Effective December 1,1989, the Company issued
1991 1990 1989 40,694,791 shares of common stock, including 123,914
BASIC FOOD COMPANIES shares added to treasury stock, in connection with a three-
Long-term debt $212.2 $ 63.0 $ 52.3 for-two stock split.All references in the financial statements
Short-term debt 89.0 100.5 73.6
Finance expense 2.1 .4 .5 with regard to number of shares of common stock and
Bank service and facility fees 6.5 3.4 3.4 related dividends and per share amounts have been restated
Interest income (25.0) (16.4) (14.6))
Interest capitalized (6.4) (4.7) (2.0) to reflect the stock split.
Total Basic Food Companies 278.4 146.2 113.2 In conjunction with the acquisition of Beatrice
FINANCE COMPANIES Company(see Note 2), ConAgra issued 141,955 shares of
Long-term debt 3.3 3.9 4.7 Class E$2,500 cumulative convertible voting preferred
Short-term debt 16.3 20.5 14.4
Total Finance Companies 19.6 24.4 19.1 stock Series 1 totaling$354.9 million and 11,076,151
Consolidated net interest shares of common stock at a fair value of approximately
expense $298.0 $170.6 $132.3 $354.9 million.
On November 29, 1990, the Company completed the
Short-term debt interest expense of$19.3 million, sale of 4.4 million shares of ConAgra common stock.The
$19.5 million and$22.0 million in 1991, 1990 and 1989, issue was priced at$33.25 per share. The net proceeds to the
respectively, incurred to finance hedged inventories,has been Company of approximately$144 million were used
charged to cost of goods sold. primarily for acquisitions (including the Elders acquisition)
In August 1990,the Company entered into interest rate and also for general corporate purposes.
swap agreements which effectively fixes the interest rate on$400
million principal of floating-rate debt at 9.4%for five years. 12. STOCK OPTIONS AND RIGHTS
10. OTHER NONCURRENT LIABILITIES Stock option plans approved by the stockholders
provide for the granting of options to employees for the
Other noncurrent liabilities consist of the following purchase of common stock at prices equal to the fair market
estimated liabilities of Beatrice Company (see Note 2) at value at the time of the grant, and for the issuance of
May 26, 1991: restricted or bonus stock without direct cost or at reduced
cost to the employee. During fiscal 1991 and 1990, 76,000
Income taxes and interest thereon $ 712 and 390,000 shares of restricted stock were issued. The value
Post retirement health care and pensions 227
Other 277 of the restricted and bonus stock, equal to fair market value
1,216 at the time of the grant, is being amortized as compensation
expense or will be paid by a reduction in current and future
Less estimated current portion 150 incentive compensation liabilities to the employee. The
$1,066 compensation expense for fiscal 1991 and 1990 was $1.2
11. CAPITAL STOCK million and$1.0 million. For the most part, options granted
are exercisable in five equal annual installments and expire
ten years after date of grant. For participants under the long-
The Company has authorized shares of preferred stock
as follows: term senior management incentive plan, options are not
Class B -$50 par value; 150,000 shares exercisable for three to five years from the date of grant. The
Class C- $100 par value; 250,000 shares option shares are subject to changes in capitalization.
Class D -without par value; 1,100,000 shares
Class E-without par value; 2,500,000 shares
The changes in the outstanding stock options during 13. PREFERRED SHARES SUBJECT TO
the three years ended May 26, 1991 are summarized below: MANDATORY REDEMPTION
OPTION PRICE 1991 1990
SHARES PER SHARE-RANGE Outstanding—ClassD
Balance at May 29, 1988 4.1 $ 1.91 -20.75 $2.50 cumulative convertible,
Granted 1.5 3.74-20.75 outstanding 48,991 shares in
Exercised (.6) 1.91-20.67 1991 and 86,904 shares in 1990 $ 1.2 $2.2
Outstanding—Class E,Series 1
Canceled (.2) 4.78-20.67 $2,500 cumulative convertible,
Balance at May 28, 1989 4.8 4.11-20.75 outstanding 141,955 shares in 1991 354.9 —
Granted 1.3 20.25-29.13
Exercised (.6) 4.11 -26.00 Annually, on July 20,the Company shall call for
Canceled (.2) 678-26.00 redemption a number of shares of Class D preferred stock
Balance at May 27, 1990 5.3 4.39-29.13 p to l ua e 5 percent of the a re ate number of shares issued
Granted 1.5 31.88-44.75 q � g
Exercised (1.1) 4.39-31.88 by paying in cash $25.00 per share plus accrued dividends.
Canceled (.2) 6.78-31.88 All or any portion of the Class D preferred stock may be
Balance at May 26, 1991 5.5 $ 4.78-44.75 called for redemption by the Company at any time at a price
Exercisable at May 26, 1991 3.1 of$25.00 plus accrued dividends.The holders of the Class
D preferred stock have the option at any time to convert
At May 26, 1991,6,570,599 shares were reserved for their shares to common stock at the rate of 4.62 shares of
granting additional options and restricted or bonus stock common stock for each share of Class D preferred stock.
awards. Conversions are applied against redemption requirements.
Each share of common stock carries with it a Right The Class E$2,500 cumulative convertible preferred
which entitles the holder thereof until the earlier of July 24, stock has a dividend rate of 6.75%, is convertible into
1996, or the redemption of the Rights,to buy one share of ConAgra common stock at the rate of 67.8485 shares of
common stock at an exercise price of$66.67. The Rights common stock for each share of preferred, is entitled to 17
will be represented by the common stock certificates and will votes per share voting as a single class with the common
not be exercisable or transferable apart from the common stock,and is subject to mandatory redemption on
stock until the earlier of ten days after announcement that a August 14, 2002.
person or group (Acquiring Person) has acquired beneficial At May 26, 1991, 226,296 and 9,631,433 shares of
ownership of 20 percent or more of the Company's common common stock were reserved for conversion of Class D and
stock or ten days after a person commences, or announces Class E preferred stock, respectively.
an intention to commence, an offer for 30 percent or more
of the Company's common stock. In the event that(i) any
person or group becomes an Acquiring Person, or (ii) the
Company is acquired in a merger or other business
combination transaction or 50 percent or more of the
Company's assets or earning power is sold,each holder of a
Right (other than the Acquiring Person) will thereafter have
the right to receive, upon exercise, shares of common stock
(of the Company under (i) and of the acquiring company
under(ii)) having a value of twice the exercise price of the
Right. The Company may redeem the Rights at$.0167
per Right at any time before a person becomes an
Acquiring Person.
At May 26, 1991, 139,674,003 shares of common stock
were reserved for exercise of the Rights.
14. COMMITMENTS 15. CONTINGENCIES
Certain facilities and transportation equipment are With respect to operations of the Company excluding
leased under agreements expiring at various dates during he the transaction discussed below, there was no litigation at
next seventeen years. Management expects that in he May 26, 1991 which, in the opinion of management,would
normal course of business,leases that expire will be renewed have a material adverse effect on the financial position of
or replaced by other leases. Substantially all leases require the Company.
payment of property taxes, insurance and maintenance costs On August 14, 1990, ConAgra acquired Beatrice
in addition to rental payments. Company(see Note 2). Beatrice and its subsidiaries are
A summary,of rent expense charged to operations engaged in various litigation proceedings incident to their
follows: respective businesses and in various environmental and other
1991 1990 1989 matters. Beatrice and various of its subsidiaries have agreed
Cancelable $ 71.3 $ 60,5 $ 51.4 to indemnify divested businesses or the purchasers thereof
Noncancelable 110.4 81.4 73.5 for various legal proceedings and tax matters. The federal
$181.7 $141.9 $124.9 income tax returns of Beatrice and its predecessors for the
A summary of noncancelable operating lease fiscal years ended 1985 through 1987 are currently under
commitments follows: audit by the Internal Revenue Service. Beatrice is currently
negotiating with the Appellate Division of the Internal
TYPE OF PROPERTY Revenue Service proposed deficiencies reviousl claimed for
FISCAL YEARS REAL AND OTHER TRANSPORTATION P Y
ENDING IN PROPERTY EQUIPMENT fiscal years prior to 1985 (principally fiscal years ended 1982
1992 1993 $692 $34.4 through 1984).Additionally, the federal income tax returns
1994 60.7 31.5 of Norton Simon, Inc. ("NSI"), a wholly owned subsidiary
1995 41 2 28.6 5.0 of Beatrice, have been audited by the Internal Revenue
1996 27.4 20.5 Service for the fiscal years ended 1982 and 1983 and a report
Later Years 88.6 67.8 has been issued. NSI has timely protested the findings
containedx report and is otiating
For the most part, the Company's operations in Puerto with the AppellaAppellateDiv Division of the Internal Revenue ServiceRico are supplied from the United States by ocean in an attempt to resolve disputed items.Various state tax
transportation under terms of a time charter. Charter fees are authorities are also examining tax returns of Beatrice and its
considered cost of product on an as-delivered basis and are predecessors for prior taxable years, including, in the case of
not reflected as rent expense. The current charter,which one state,years back to fiscal 1978. Beatrice expects that
expires December 31, 2000, includes a provision for standby additional claims will be asserted for additional taxes. It is
charges as defined of approximately$9,000 per day when not possible at this time to determine the ultimate liabilities
he equipment is not in use. Since the Company's demand that may arise from these matters which at any given point
for shipping is substantially in excess of the capacity of the in time will be at various stages of administrative and legal
equipment under charter, standby charges have not been proceedings and will aggregate hundreds of millions of
incurred. dollars. Beatrice has established substantial reserves for these
In connection with its trading activities, the Company matters which are reflected as liabilities on its consolidated
had letters of credit and performance bonds outstanding at balance sheet. The liabilities include interest accrued for
May 26, 1991,aggregating approximately$455 million. tax claims.
After taking into account liabilities that have been
recorded and possible recoveries from third parties,
management is of the opinion that the disposition of the
above matters will not have a material adverse effect on
ConAgra's consolidated financial condition.
16. RETIREMENT PLANS The actuarial projected benefit obligation was
The Company and its subsidiaries have defined benefit determined using an assumed discount rate of 8.5% (9.0%
retirement plans (Plan) for eligible salaried and hourly with respect to Beatrice in 1991) and long-term rate of
employees. Benefits are based on years of credited service compensation increases of 5.5% to 6.0%. Pension costs were
and average compensation or stated amounts for each year of determined using along-term race of return of 8.5% (9.5°/i
ervice. with respect to Beatrice in 1991).
Consolidated pension costs consisted of the following: The Company and its subsidiaries are also participants
991 990 in multi-employer pension plans covering certain hourly
989 employees. Costs associated with these plans for 1991 were
Plan Assets Accumulated Plan Assets Accumulated
Exceed Benefits Exceed Bene90 $4.7 million. Costs in Atcmm�iated E,c d Aecnmtasted Exerts prior years were not significant.
Benefits Plan Assev Be,efre Peen Arse¢
Service cost $24.2 $ 1.5 $13.6 $1.0 $ 11.7 17. BUSINESS SEGMENTS
Interest cost 37.8 11.6 14.7 10.8 13.8
—7,3s Actual return on
plan assets (69.9) (10.0) (29.6) (10.6) (17.9) The Company has four business segments with
Net amortization operations principally limited to the United States.
and deferral 25.6 .5 12.6 1.4 1.1 Intersegment sales have been recorded at amounts
Mergers and settlements _5 — — — (.2) approximating market. Operating profit for each of the
Net pension costs $18.2 $ 3.6 $11.3 $2.6 $ 8.5 segments is based on net sales less all identifiable operating
equity in earnings of
The funded status of the plans at February 28, 1991,and companies in expenses and includes l
included on the basis of the equity method of
February 28, 1990,dates of the most recent actuarial reports, accounting. General corporate expense, interest expense
was as follows:
(except Finance Companies segment) and income taxes have
991 990 been excluded from segment operations.All assets other
Plan Assets Accumulated Plan Assets Accumulatedthan cash (except Finance Companies segment) and those
na Exceed
ce a,rd Bx�eS ACE Exceed Bx^� assets related to the corporate office have been identified
Renee❑ Pan Am n Bcneen Pmn n em with the segments. For the Finance Companies segment,
Plan assets at fair value $626.2 $123.7 $229.4 $116.6 operating profit includes the effect of interest, which is a
Projected benefit obligation large element of its operating costs.
1991 1990
Actuarial present value of vested
benefits 446.2 144.9 151.5 131.4 Sales to unaffiliated customers 1989
Actuarial present value of
nonvested benefits 14,8 1.7 7.2 1.7
Basic Food Companies
461.0 46.6 58.7 33.1 Ag° Products $ 2,443.6 $ 2,330.2 $ 2,242.7
Additional obligation Trading&Processing 1,862.0 1,959.2 1,869.0
of projected Prepared Foods 15,045.5 11,031,7 7,084,9
compensation increases... 101.0 1.4 40.9 .7
33.8 19,351.1 15,321.1 11,196.6
562.0 148.0 199.6
Finance Companies 153.6 180.1 143.8
Plan assets in excess of(less than) Total $19,504.7
projected benefit obligations $ 64.2 $(24.3) $ 29.8 $(17.2) $15,501.2 $11,340.4
Intersegment sales
Consisting of Basic Food Companies
Unrecognized transition asset $ 32.2 $ (5) $ 34.2 $ (.3� Agri-Products $ 20.4 $ 22.6 $ 28.0
Unrecognized prior service cost (10.3) 1.1 (8.9) (1 8 Trading&Processing 118.4 100.0 65.6
Unrecognized net gain(loss) 85.9 5.9 9.6 (1 Prepared Foods 16 9 18 2 24 4
Adjustment to recognize
minimum liability _ 32 _ 155.7 140.8 118.0
Accrued pension cost on 3.2 Intersegment elimination (155.7) (140.8) (118.0).
consolidated balance sheet (43.6) (34.0) (5.1) (18.2) Total $ _ $ — $
$ 64.2 $(24.3) $ 29.8 $(17.2) Net sales
Basic Food Companies
Plan assets are primarily invested in equity securities, Agri-Products $ 2,464.0 $ 2,352.8 $ 2,270.7
corporate and government debt securities and common trust PreparedF Foods
1,980.4 2,0592 7,934.6
funds. In fiscal 1989, plans with accumulated benefits P 15 062.4 11,049.9 7,109.3
exceeding plan assets were not material. Included in plan Intersegment elimination 19,506.8 15,461.9 11,314.6
(155.7) (140.8) (118.0)
assets are 853,314 shares of the Company's common stock at
Finance Companies 153.6 180.1 143.8
a fair market value of$31.6 million at February 28, 1991. 19'351.1 15,321.1 11,196.6
Total $19,504.7 $15,501.2 $11,340.4
1991 1990 1989 18, SUPPLEMENTAL CASH FLOW INFORMATION
Operating profit
Basic Food Companies 1991 1990 1989
Agri-Products $ 94.0 $ 87.2 $ 82.1
Tgading&Processing 100.1 97.5 83.4 Cash paid during the year for
Prepared Foods 663.0 349.2 293.1 Interest(net of amount capitalized)
857.1 533.9 458.6 Basic Food Companies $ 230.1 $144.3 $107.5
Finance Companies 13.1 15.9 g 7 Finance Companies 19.9 24.3 19.0
Total operating profit $250.0 $168.6 $126.5
P g P 870.2 549.8 468.3 General corporate expenses .. 76.6 46.7 42.9 Income taxes
Interestexpense—Basic Basic Food Companies $107.3 $ 96.3 $103.3
Food Companies 278.4 146.2 1132 Finance Companies 5.8 6.7 3.8
Total $ 515.2 $ 356.9 $ 312.2 $ 113.1 $103.0 $107.1
Identifiable assets Noncash investing and financing
Banc Food Companies activities—Basic Food Companies
Agri-Products $ 560.8 $ 561.0 $ 562.3 Issuance of common stock for
]Fading&Processing 1,366.2 1,324.8 1,059.8 conversion of preferred stock $ 9 $ 6.5 $ .9 't
Prepared Foods 6,279.0 2,059.3 1,490.6 Long-term debt,other noncurrent
Corporate 520.6 75.5 348.2 liabilities and preferred stock
8,726.6 4,020.6 3,460.9 assumed in business acquisitions 2,263.8 211.5 8.6
Finance Companies 693.7 783.6 817.3 Common and preferred stock
Total $9,420.3 $4,804.2 $4278,2 issued in business acquisitions
accounted for as a purchase.. 709.8 — —
Common stock issued in
Additions to property,plant, business acquisitions accounted
and equipment(including for as a pooling of interests.. — 3.9 16.6
businesses acquired)
Basic Food Companies Payment for business acquisitions—
Agri-Products $ 13.7 $ 9.6 $ 8.0 Basic Food Companies
Tfading&Processing 89.4 55.0 96.3 Receivables,inventories and
Prepared Foods 1,036.2 282.8 134.5 prepaid expenses $981.0 $ 193.4 $ 196.2
Corporate 17.7 1.1 .8 Accounts payable and accrued
1,157.0 348.5 239.6 liabilities (905.5) (95.6) (101.5)
Finance Companies 2.9 .8 1.5 Short-term notes payable and
Total $1,159.9 349.3 $ 241.1 current maturities (99.6) (115.2) (4.5)
$ Increase in investment in
Depreciation and unconsolidated subsidiary 43.7 - -
Property,plant and equipment 828.1 153.0 77.6
amortization Goodwill 2,517.1 138.6 10.1
Basic Food Companies Long-term debt (1,105.6) (183.3) (8.6)
ri-Products $ 14.3 $ 14.4 $ 12.8 Deferred taxes 257.3
"Wading tk Processing 28.0 25.2 21.4 Other noncurrent liabilities (1,158.2
Prepared Foods 201.6 83.2 60.2 Preferred stock (354.9 28.2)
Corporate 22 _ 1.9 3.3 Common stock (354.9 —
246.1 124.7 97.7 Other,net 121.4 9.2 (19.7)
Finance Companies 4.7 5.0 4.0 Reduction in investment in
unconsolidated subsidiary
Total $ 250.8 $ 129.7 $ 101.7
upon acquisition of previously
50-percent-owned company — (54,3) —
$ 769.9 $ 17.6 $ 149.6
19. NONRECURRING ITEMS
The fiscal 1990 first quarter earnings include two
nonrecurring items: a$26.9 million after-tax gain, net of
expenses, from settlement of litigation related to Holly
Farms Corporation and a$24.8 million after-tax provision
for realigning processed meats operations. The net gain from
these items is$2.1 million after tax(two cents per share).
Additional information is as follows:
Amount received in settlement of
litigation related to Holly Farms,
net of expenses $ 43.5
Provisions for realignment
of processed meats operations
Writedown of property,plant and equipment (13.6)
Plant consolidation costs (23,9)
(37.5)
Net nonrecurring items before tax 6.0
Provision for income taxes 3.9
Net nonrecurring items after tax $ 2,1
20. QUARTERLY RESULTS (UNAUDITED)
Stock Market Dividends
Net Gross Net Income Price Declared
Fiscal 1991 Sales Profit Amount Per Share Hugh Low Per Share
First $ 4,487.4 $ 454.5 $ 58.0 $ .45 $ 35.50 $29.50 $ .1500
Second 5,328.3 723.3 88.2 .60 36.63 30.25 .1725
Third 4,874.2 684.5 65.6 .42 42.88 33.13 .1725
Fourth 4,814.8 710.2 99.4 .65 48.75 39.75 .1725
Year $19,504.7 $2,572.5 $311.2 $2.13 $48.75 $29.50 $.6675
Fiscal 1990
First $ 4,006.0 $ 400.4 $ 50.0 $ .40 $26.08 $21.17 $ .1283
Second 3,857.1 412.2 63.9 .52 27.83 21.33 .1500
Third 3,623.8 397.5 44.3 .36 30.25 22.75 .1500
Fourth 4,014.3 444.6 73.5 .59 31.88 24.88 .1500
Year $15,501.2 $1,654.7 $231.7 $1.87 $31.88 $21.17 $.5783
Quarterly per share numbers may not add to annual total due to rounding.
INVESTOR INFORMATION
CONAGRA STOCKHOLDERS ANNUAL MEETING OF STOCKHOLDERS
At the end of fiscal 1991, approximately 139.7 The annual meeting of ConAgra's stockholders will
million shares of ConAgra common stock were out- be held on Thursday, September 26, 1991 at 2 p.m. at
standing. There were about 16,800 stockholders of record the Red Lion Inn, 1616 Dodge Street, Omaha, Nebraska.
and an estimated 35,000 beneficial holders whose shares We encourage stockholders to participate in this
are held in names other than their own. (These figures do meeting in person or by proxy. We invite stockholders
not include the large number of employees holding stock who attend in person to come for a reception with light
thtough the ConAgra Retirement Income Savings Plan, product sampling from 1 until 1:45 p.m. Stockholder
the Employee Stock Ownership Plan, or the Employee registration also begins at 1 p.m.
Payroll Stock Purchase Plan.) AVAILABILITY OF 10K REPORT
ConAgra stockholders reside in all 50 states, the
District of Columbia and a number of overseas locations. The Form l0K is an annual filing with the Securities
and Exchange Commission. Stockholders may obtain a
DIVIDEND INCREASES copy of the Form 10K annual report for fiscal 1991 by
ConAgra's dividend objective and a five-year record calling or writing to the Corporate Communications
of results are on page 5 of this report. The common stock Department, ConAgra, Inc., One ConAgra Drive,
dividend was increased 15 percent, effective December 1, Omaha, Nebraska 68102-5001, (402)595-4157.
1990. The two previous increases were 17 percent in CORPORATE HEADQUARTERS
December 1989 and 15 percent in December 1988. ConAgra, Inc.
The common stock annual dividend rate has more than One ConAgra Drive
quadrupled in the last 10 years, from about 174 at the Omaha, Nebraska 68102-5001
end of fiscal 1981 to 694 at the end of fiscal 1991. (402)595-4000
STOCK LISTING AND PERFORMANCE STOCK TRANSFER AGENT AND REGISTRAR
ConAgra's common stock is listed on the New York Manufacturers Hanover Trust Co., 450 West 33rd
Stock Exchange. The ticker symbol is CAG. Current Street, New York, New York 10001, (212)613-7147 or
share price and related information can be found in the 800-MH-SHARE. The stock transfer agent can help
financial section of most daily newspapers. On page 32 of stockholders with questions about their ConAgra shares.
this report is an eleven-year summary giving the high, low
and closing prices of ConAgra shares each fiscal year. For AUDITORS
the two most recent fiscal years, the high and low prices Deloitte&Touche
for each quarter are shown on page 60.
During fiscal 1991, 58.6 million shares were traded, COUNSEL
a daily average of 232,523 shares. During fiscal 1990, McGrath, North, Mullin & Kratz, P.C.,
46.4 million shares were traded, a daily average of Omaha, Nebraska
184,087 shares. General Counsel: Bruce C. Rohde
Assistant General Counsel: David L. Hefllinger
DIVIDEND REINVESTMENT PLAN
ConAgra's stockholders of record may elect t0 STOCKHOLDER RELATIONS
have common and/or preferred dividends automatically ConAgra maintains an active investor relations
program to keep stockholders and potential investors
reinvested in ConAgra common stock. Participating
stockholders also may invest from$25 to $5000 a informed about company activities. We welcome
calendar quarter to purchase additional shares of common comments and questions from our stockholders.Any-
stock. Both services are free... stockholder participants pay time you would like information about ConAgra,we
no brokerage commissions or bank fees to purchase stock. encourage you to call or write to Walt Casey or Lynn
If you are interested in this plan, lease request a copyPhares in our Corporate Communications Department,
y P P q ConAgra, Inc., One ConAgra Drive, Omaha, Nebraska
of ConAgra's dividend reinvestment brochure and
enrollment card from Manufacturers Hanover Trust 68102-5001, (402)595-4154 or 4153.
Company, P.O. Box 24935, Church Street Station, New
York, New York 10249-0007, or the Corporate Secretary,
ConAgra, Inc., One ConAgra Drive, Omaha, Nebraska
68102-5001. Or,simply return the prepaid postcard
included with each quarterly dividend check.
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